Supler Company produces a part used in the manufacture of one of its products. The...
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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: Direct materials = $8 Direct labor = $4 Variable manufacturing overhead = $1 Fixed manufacturing overhead = $5 Unit product cost (total of above costs) = $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: $1 disadvantage $1 advantage $2 advantage $4 disadvantage show work please
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