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Han Products manufactures 47,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per
Han Products manufactures 47,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S6 is as follows: Direct materials Direct labour Variable overhead Fixed overhead $ 5.25 11.25 4.25 10.05 ook Total cost per part $30. 80 nt lences An outside supplier has offered to sell 41.500 units of part S-6 each year to Han Products for $27.25 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S 6 could be rented to another company at an annual rental of $98.000. However, Han Products has determined that 30% of the fixed overhead being applied to part S 6 will be avoided if part S-6 is purchased from the outside supplier. Required: 1. What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Round "Total costs" and finel answer to the nearest whole doller omount.) Net dollar disadvantage
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