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IClean Company manfactures Vacuum Cleaners. The per unit costs to manufacture the hose assembly (part 22B ) included with the vacuum eleaner are given below:
IClean Company manfactures Vacuum Cleaners. The per unit costs to manufacture the hose assembly (part 22B ) included with the vacuum eleaner are given below: Additional Information: - The special equipment used to manufacture part 22B has no resale value. - The total amount of general factory overhead, which is allocated on the basis of direct labor hours, would be unaffected by this decision. - The $50 unit product cost is based on 10,000 parts produced each year. - An outside supplier has offered to provide the 10,000 parts at a cost of \$42 per part. The company is trying to decide if it should stop making part 22B and buy it from an outside supplice. - What is the total avoidable cost of making the part if instead of making it is bought from an outside supplier - What is the total cost of buying the part from an outside supplier - What is the advantace or (disadvantage) of buying the part from an outside supplier. Indicate disadvantage with a minus sign
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