Answer Happy

Question 3 - Chapters 12 & 13 Oraded Homework - Connect & 13 Graded Homework Saved Help Save & Exit Sub Exercise 13-11 (Algo) Make or Buy Decision (LO13-3] Han Products manufactures 37,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead. Total cost per part $ 3.60 9.00 2.40 6.00 $ 21.00 An outside supplier has offered to sell 37,000 units of part 5-6 each year to Han Products for $19 per part. If Han Products accept this offer, the facilities now being used to manufacture part 5-6 could be rented to another company at an annual rental of $87000 However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part 5-6 would continue even if part 5-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?