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Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of: producing the 9.800 units of the

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Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of: producing the 9.800 units of the part that are needed every year An outside supplier has offered to make the part and sell it to the company for $30.00 each. If this offer is accepted, the supervisors salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entice company, If the outside supplier's offer were accepted, only $2,900 of these allocated general ovethead costs would be avoided In addition, the space used to produce part Q89 could be used to make more of one of the companys other products. generating an additional segment margin of $18,000 per year for that product. Required: a. What is the financial advantage (disadvantage) of accepting the outside supplier's offer? b. Shouid the company make or buy Q89

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