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Motor Company manufactures 10.000 units of Part M-l each year for use in its production. The following total costs were reported last year Direct Materials

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Motor Company manufactures 10.000 units of Part M-l each year for use in its production. The following total costs were reported last year Direct Materials Direct Labor Variable Overhead Fixed Overhead Total Cost $20,000 55.000 45,000 70,000 $190,000 A supplier has offered to sell Motor 10,000 units of Part M-1 for $18 per unit. If Motor accepts the offer, some of the facilities used to manufacture Part M-1 could be rented to a third party at an annual rental of $15,000. Additionally, $40,000 of fixed overhead would be eliminated. Should Motor Company purchase the part? Multiple Choice O ) No, because it would be $15.000 cheaper to make the part O No, because t would be $5,000 cheaper to make the part O 0 Yes, because it would be $25,000 cheaper to buy the part O Yes, because it would be $10.000 cheaper to buy the part

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