part U16 used by Mcvean Corporation to make one of its products. A total of 18,000

Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $19, computed as follows: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Unit product cost An outside supplier has offered to provide the annual requirement of 6,600 of the parts for only $15 each. The company estimates that 80% of the fred manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage of purchasing the parts from the outside supplier would be: Multiple Choice O $3 per unit on average (52) per unit on average C 5 4) per unit on average