://reader.texidium.com/dist/#/book/16949 um by Kivuto er Segments Guy Decision 5 Foducts: Target Constrained Costs and the approach -ctives Summary Ompetency em 1: Relevant Costs em 2: Adding a onal 15 S Skills swers bital Budgeting ver Chapter 10) ndard Cocts and N/A EXERCISE 9-4 Determining Whether to Make or Buy [LO1 - CC4] Han Products manufactures 55,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials Direct labour Variable overhead Fixed overhead Total cost per part Accounting and Financial Management - MGMT8500 % Q Search $6.66 ill be indiff 18.50 An outside supplier has offered to sell 48,000 units of part S-6 each year to Han Products for $38.85 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $148,000. However, Han Products has determined that 30% of the fixed overhead being applied to part S- 6 will be avoided if part S-6 is purchased from the outside supplier. Exercises 4.44 Required: 1. Prepare computations to show the net dollar advantage or disadvantage of accepting the outside supplier's offer. 16.65 $46.25 D