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Plz help me out to resolve this quuestion. Plz share the detaile formula and explanations with me. Royal Company manufactures 10,000 units of Part R-3
Plz help me out to resolve this quuestion.
Plz share the detaile formula and explanations with me.
Royal Company manufactures 10,000 units of Part R-3 each year. At this level of activity, the cost per unit for Part R-3 follows: An outside supplier has offered to sell 10,000 units of Part R-3 each year to Royal Company for $54 per part. If Royal Company accepts this offer, the facilities now being used to manufacture Part R-3 could be rented to another company at an annual rental of $150,000. However, Royal Company has determined that $15 of the fixed manufacturing overhead being applied to Part R-3 would continue even if the part was purchased from the outside supplier. Required: Compute the net dollar advantage or disadvantage of accepting the outside supplier's offer
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