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Han Products manufactures 57,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per

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Han Products manufactures 57,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials Direct labour Variable overhead. Fixed overhead Total cost per part $6.25 12.25 5.25 10.65 $34.48 An outside supplier has offered to sell 50,500 units of part S-6 each year to Han Products for $30.25 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 $106,000. 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 final answer to the nearest whole dollar amount.) Net dollar disadvantage A

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