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Sotahampton Copporation manufactises past M40 and use it in one of its products. The company reports the follawing conts of producin the 2,000 umats of

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Sotahampton Copporation manufactises past M40 and use it in one of its products. The company reports the follawing conts of producin the 2,000 umats of tile pat: An outside supplier has offered to make the part and sell it to the company for $5000 each. If thet atfer as accepted, two- thard of the electraty of the fictury can be avoided. The special tool ased to make the part was parchased many year ago and has no alvage value or ohher use. Tho allocated geperal orerbead represents fixed costs of the entire compary: If the outside supplier's offer was accepted, 38,900 of these allocated genernl oserhead cont wiwht bo unavoidable in addition, the space used to produce part M40 could be used to make more of one of the company's ofbet ptoducts, generating an additinnal segment margia of 55,000 per year for that product Reguired: a. What is the financial advantage (diadyantage) of accepting the ounade supplier's ofter? Would Southanapton Corporation be financially tietien otf to continue making part Ma0 of to buy it from an cutside supplief? And way? ? ? 25 Mhiks) b. Assume shat Southampton Codporation requires additiotal equapmeat that costs $5,000 to make part M40. As a resuht, the direct labor cont will Jecteuce by $4,00 per unit. What is the financial advantage (disadvantage) of accepting the out ide supplier's offer? (2. 55 Mapkin) c. Eascd oa your calcuation in requitenents (a) and (b), which case would be better ofi for Southaraptoa Cecpotation

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