Required information [The following information applies to the questions displayed below.] A company produces two products. Product 1 sells for $170 and Product 2 sells for $130. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Product 1 $ 30 Product 2 Direct materials $ 18 Direct labor 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead 26 28 Variable selling expenses 22 18 Common fixed expenses 25 20 Total cost per unit $153 $124 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Consider each of the following questions separately. 5. The company expects to produce and sell 90,000 units of Product 1 during the current year. A supplier has offered to manufacture and deliver 90,000 units for a price of $120 per unit. What is the financial advantage (disadvantage) of buying 90,000 Product 1 units from the supplier instead of making those units? x