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products it manufactures. The unit product cost of this part is computed as 15. Foster Company makes 20,000 units per year of a part it uses in the follows: Direct materials Direct labor Variable MFG overhead Fixed manufacturing overhead 13.40 (5.10 allocated, 8.30 Traceable) Unit product cost $24.70 16.30 2.30 $51.80 a unit. $56.70 An outside supplier has offered to sell the company all of these parts it needs for If the part were purchased from the outside supplier. $5.10 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead The net total dollar effect of purchasing the part rather than making it would be cost would be applied to the company's remaining products. A) Increase of $98,000 cost B) Decrease of $98,000 cost C) Increase of $4,000 cost D) Decrease of $4.000 cost 16. Buy-Rite Pharmacy has purchased a small auto for delivering prescriptions. The auto was purchased for $28,000 and will have a 6-year useful life. Delivering prescriptions (which the pharmacy has never done before) should increase cash revenues by at least $32,000 per year. The cash cost of these prescriptions to the pharmacy will be about $25,000 per year. The payback period for the auto is closest to: A) 4 years B) 1.8 years C) 2 years D) 1.2 years