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Supler Company produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows: direct
Supler Company produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows: direct materials direct labor variable manufacturing overhead fixed manufacturing overhead unit product cost 8 4 1 5 18 An outsie supplier has offered to provide the annual requirement of 4,000 of the parts for only $14 each. It is estimated that 60 percent of the fixed overhead cost above could be eliminated if the parts are purchased from the outside supplier. Based on these data, the per-unit dollar advantage or disadvantage of purchasing from the outside supplier would be: 1 disadvantage 1 advantage 2 advantage 4 disadvantage
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