Part E14 is used by M Corporation to make one of its products. A total of 15.500 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $3.40 $8.00 $8.50 $3.98 $2.30 $7.50 An outside supplier has offered to make the part and sell it to the company for $26.70 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part E14 could be used to make more of one of the company's other products, generating an additional segment margin of $27,500 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part E14 from the outside supplier should be: A customer has requested that L Corporation fill a special order for 3,000 units of product R35 for $30 a unit. While the product would be modified slightly for the special order, product R35's normal unit product cost is $22.90: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 6.60 4.ee 3.7e 8.60 $22.9e Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product R35 that would increase the variable costs by $2.20 per unit and that would require an investment of $10,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice