Grand Limited currently produces a component of a product with the following per unit production costs:

Direct materials

$18

Direct labour

31

Overhead

18

Total production costs

$67

Grand Ltd. currently manufactures these components in-house, averaging production of 29020 units each year.A supplier has approached the company offering to supply 29020 units each year at a cost of $48 each.

60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead costs would be avoidable.

What is Grand's net advantage to buying the component from the supplier?

Select one:

a.$342436

b.There is no advantage from buying it from the supplier.

c.$203140

d.$237964