company manufactures 38,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials $ 3.10 10.00 Direct labor Variable manufacturing overhead 2.90 9.00 Fixed manufacturing overhead Total cost per part $ 25.00 the company the comany the company An outside supplier has offered to sell 38,000 units of part T-25 each year to for $21 per unit. If accepts this offer, it can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $88,000. However, has calculated that two-thirds of the fixed manufacturing overhead being applied to part T-25 will continue even if the part is bought from the outside supplier. What is the financial advantage of accepting the outside supplier's offer? $15,000 $12,000 $14,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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company manufactures 38,000 units of part T-25 each year. The company's cost per unit for part T-25 is:
Direct materials
$ 3.10
10.00
Direct labor
Variable manufacturing overhead
2.90
9.00
Fixed manufacturing overhead
Total cost per part
$ 25.00
the company
the comany
the company
An outside supplier has offered to sell 38,000 units of part T-25 each year to
for $21 per unit. If¶
accepts this offer, it
can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $88,000. However,
has calculated that two-thirds of the fixed manufacturing overhead being applied to part T-25 will continue even if the part is bought
from the outside supplier.
What is the financial advantage of accepting the outside supplier's offer?
$15,000
$12,000
$14,000
$10,000
Transcribed Image Text:company manufactures 38,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials $ 3.10 10.00 Direct labor Variable manufacturing overhead 2.90 9.00 Fixed manufacturing overhead Total cost per part $ 25.00 the company the comany the company An outside supplier has offered to sell 38,000 units of part T-25 each year to for $21 per unit. If¶ accepts this offer, it can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $88,000. However, has calculated that two-thirds of the fixed manufacturing overhead being applied to part T-25 will continue even if the part is bought from the outside supplier. What is the financial advantage of accepting the outside supplier's offer? $15,000 $12,000 $14,000 $10,000
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