This question will be sent to your instructor for grading. McGraw Company uses 5,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $100,000, computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost $ 15,000 30,000 10,000 45,000 $ 100,000 An outside supplier has offered to provide Part X at a price of $18 per unit. If McGraw Company stops producing the part internally, one- third of the fixed manufacturing overhead would be eliminated. Assume that direct labor is a variable cost. Required: Prepare an analysis showing the annual financial advantage or disadvantage of accepting the outside supplier's offer. Essay Toolbar navigation. BIUS === Av