Question
Han-8862 company manufactures 20,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials Direct labor Variable
Han-8862 company manufactures 20,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.40 8.00 2.60 9.00 $ 23.00 An outside supplier has offered to sell 20,000 units of part T-25 each year to Han-8862 for $19 per unit. If Han-8862 accepts this offer, it can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $70,000. However, Han-8862 has calculated that two-thirds of the fixed manufacturing overhead being applied to part T-25 will continue even if the part is bought from the outside supplier. What is the financial advantage of accepting the outside supplier's offer? $33,000 $28,000 $30,000 $32,000
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