Inc. Corp company manufactures 34,000 units of part T-25 each year. The company's cost per unit for part T-25 is:

An outside supplier has offered to sell 34,000 units of part T-25 each year to Inc. Corp for $21 per unit. If Inc. Corp 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 $84,000. However, Inc. Corp 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 suppliers offer?

multiple choice

$19,000

$14,000

$18,000

$16,000

\begin{tabular}{lr} Direct materials & $3.80 \\ Direct labor & 11.00 \\ Variable manufacturing overhead & 2.20 \\ Fixed manufacturing overhead & 6.00 \\ \hline Total cost per part & $23.00 \\ \hline \hline \end{tabular}