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Pirkin Company produces a part used in the manufacture of one of its products. The unit product cost of the part is $38, computed as

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Pirkin Company produces a part used in the manufacture of one of its products. The unit product cost of the part is $38, computed as follows Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Unit Product Cost $15 $8 $5 $10 $38 An outside supplier has offered to provide the annual requirement of 10,000 of the parts for only $25 each. The company estimates that 30% of the fived manufacturing overhead costs above will continue if the parts are purchased from the outside supplierAssume that direct labour is an avoidable cost in this decision. Based on these data, what will be the per unit dollar advantage or disadvantage of purchasing the parts from the outside supplier? An outside supplier has offered to provide the annual requirement of 10,000 of the parts for only $25 each. The company estimates that 30% of the fed manufacturing overhead costs above will continue if the parts are purchased from the outside supplier. Assume that direct labour is an avoidable cost in this decision. Based on these data, what will be the per-unit dollat advantage or disadvantage of purchasing the parts from the outside supplier? Multiple Choice $10 per unit advantage Sper unit davantage 53 per unit advantage Spur unit inadvantage

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