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Han Products manufactures 50,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit
Han Products manufactures 50,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials Direct 5.50 11.50 4.50 10.20 labour Variable overhead Fixed overhead Total cost per part $31.70 An outside supplier has offered to sell 50,000 units of part S-6 each year to Han Products for $28.00 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 $100,000. However, Han Products has determined that two-thirds of the fixed overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required What is the net dollar advantage or disadvantage of accepting the outside supplier's offer?(Do not round intermediate calculations) Net Dollar Disadvantage
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