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Troy Inc. was approached by an outside vendor willing to pre - treat outdoor fabric for them ( that they currently do themselves ) for
Troy Inc. was approached by an outside vendor willing to pretreat outdoor fabric for them that they currently do themselves for $ per yard. The cost per unit to treat fabric last year was:
Direct material $
Direct labor $
Variable manufacturing overhead $
Variable selling and administrative $
Fixed manufacturing overhead, traceable $ at yard volume
Allocated fixed manufacturing overhead $ at yard volume
They expect to need yard of fabric treated this year. If they decide to outsource, they will close out the treating process completely. What is the financial advantage disadvantage of outsourcing this process to the vendor to treat the fabric? Report as a whole number with disadvantage as a negative.
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