Silver Company currently manufactures the bike seats that are installed on its bikes. The cost to produce 500 bike seats last year were as follows: Cost per bike seat Direct materials $10 $6 Direct labor Variable manufacturing overhead Fixed manufacturing overhead $4 $15 A supplier has offered to provide Silver Company with all of its bike seat needs for $26 per bike seat. Fixed manufacturing overhead of $8 per bike would be unavoidable even if the company decided to accept the supplier's offer. Question 1. Based on this information, what is the financial advantage or disadvantage of Silver Company buying the bike seats from the supplier instead of making Internally? 2. If the buy option is selected, the company will be able to use the freed up space to generate an additional $1,500 of income each year to produce and sell more of another product. Based on this information, what is the financial advantage or disadvantage of Silver Company buying the bike seats from the supplier instead of making internally? Question 1 Answers - Select One $1,000 advantage $1,000 disadvantage $500 advantage $500 disadvantage Question 2 Answers - Select One $2,000 advantage $2,000 disadvantage $2,500 advantage $2,500 disadvantage