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Question 9 3 pts Gryffindor Company uses 8,000 units of a certain part in production each year. Presently, this part is purchased from an outside
Question 9 3 pts Gryffindor Company uses 8,000 units of a certain part in production each year. Presently, this part is purchased from an outside supplier at $12 per unit. For some time, there has been idle capacity in Gryffindor's factory that could be utilized to make this part. If Gryffindor decides to make the part, there would be an increase of $12,000 in fixed manufacturing costs for the salary of a new supervisor. The following information has been assembled on the unit costs of making this part internally: Direct materials 3.25 Direct labor 2.75 2.00 Variable manufacturing overhead Fixed manufacturing overhead (Allocated) 5.00 Suppose that the idle capacity (floor space machinery) is presently being to othe company for $32,000 per year. All the other conditions are still the same. If Gryffindor chooses to make the part instead of buying it outside, the net advantage or disadvantage (per year) would be: 4,000 advantage 12,000 disadvantage O 15,000 disadvantage O 10,000 advantage + 4
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