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24) Part SS1 is used in one of Haberkorn Corporation's products. The company makes 12,000 units of this part each year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials 5 6 10 Direct labor $ 5.70 Variable manufacturing overhead $ 4.80 Supervisor's salary S 7.00 Depreciation of special equipment $ 8.60 Allocated general overhead $ 7.20 An outside supplier has offered to produce this part and sell it to the company for $37.70 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $17,000 of these allocated general overhead costs would be avoided. The annual financial advantage disadvantage) for the company as a result of buying the part from the outside supplier would be A) (55,800) B) (522,800) C) (5149.800) D) (539,800) 2 A customer has requested that Lowelling Corporation special order for 9.000 units of product 347 Tor 20.30 unit. While the product would be modified slightly for the special order, product 847's normal unit product cost is $14.40: Direct materials $ 3.10 Direct labor 1.50 Variable manufacturing overhead 6.40 Fixed manufacturing overhead 3.40 Unit product cost 5240 that direct labor is a variable cost. The special order would have no effect on che domany's total fixed manufacturing overhead costs. The customer would like lications made to product 547 that would increase the variable costs by $5.00 per it and that would require an investment of $36,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sale The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this spec! order should be: A) $(9,900) B) $4,500 C) $54,900 D) S(26,100)

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