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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:

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 $8
Direct labor 4
Variable manufacturing overhead 1
Fixed manufacturing overhead 5
Unit product cost $18


An outside 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:
A. $1 disadvantage
B. $1 advantage
C. $2 advantage
D. $4 disadvantage

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Question: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 $8
$8.00
Direct labor 4
$4.00
Variable...

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