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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 8,200 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 8,200 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 $28.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was company. If the outside fupplier's offer were accepted, only $4,600 of these allocated general overheod costa would be avoided. In additon, the space used to produce part 989 could be used to make more of one of the companys other producti, generating an additional segment margin of $17,800 per yeer for that product. nequited: a. What is the financial advantage (divodvontage) of occepting the outside suppliers offer? b. Shouid the company make or buy Q89

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