The SP Corporation makes 36,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $9.50 $8.50 $3.45 $4.40 An outside supplier recently began producing comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $23.95. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result making the motors rather than buying them from the outside supplier would be Multiple Choice (568,400) $214.200 o 90.000 $158,400 Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $17, computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 6 3 3 5 $17 An outside supplier has offered to provide the annual requirement of 7,800 of the parts for only $11 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: Multiple Choice 0 $31 per unit on average U $3 per unit on average $4 per unit on average (56) per unit on average