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You manufacture 34,876 clay pots a year for your indoor plant store at the following cost per unit: Direct materials: $3.60 Direct labor: $8.00 Variable
You manufacture 34,876 clay pots a year for your indoor plant store at the following cost per unit: Direct materials: $3.60 Direct labor: $8.00 Variable OH: $2.40 Fixed OH: $12.00 An outside supplier has offered to make the clay pots for you for $20 a unit plus $1 of shipping per unit. If you accept this, the facilities that are now being used to make the clay pots could be rented for $82,630. You have determined that % of xed overhead is related to common overhead and will continue if the clay pots are bought. What is the total annual advantageXdisadvantage of buying the clay pots? (Put a - sign in front of your number if it is a disadvantage.)
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