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An outside supplier has offered to sell the company all of these parts it needs...

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Accounting

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An outside supplier has offered to sell the company all of these parts it needs for $42 70 a unit ff the company accepts this offer, the facilities now being used to make the ould be used to make more units of a product that is in high demand The additional contribution margin on this other product would be $32, 200 per year If the part were purchased from the outside supplier. All of the direct labor cost of the part would be avoided $6 00 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacture overhead cost would be applied to the company's renaming products Required. a. How much of the unit product cost of (49.50 is relevant in the decision of whether to make or buy the part? b. What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it? c. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 14.000 units required each year

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