Han-7579 company manufactures 31,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials Direct labor $ 3.50 8.00 Variable manufacturing overhead 2.50 6.00 $20.00 Fixed manufacturing overhead Total cost per part An outside supplier has offered to sell 31,000 units of part T-25 each year to Han-7579 for $18 per unit. If Han-7579 accepts this offer, i can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $81,000. However, Han- 7579 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? O $17,000 O $19,000 O $21,000 $22,000
Han-7579 company manufactures 31,000 units of part T-25 each year. The company's cost per unit for part T-25 is: Direct materials Direct labor $ 3.50 8.00 Variable manufacturing overhead 2.50 6.00 $20.00 Fixed manufacturing overhead Total cost per part An outside supplier has offered to sell 31,000 units of part T-25 each year to Han-7579 for $18 per unit. If Han-7579 accepts this offer, i can rent out the facilities now being used to manufacture part T-25 to another company at an annual rental of $81,000. However, Han- 7579 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? O $17,000 O $19,000 O $21,000 $22,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Han-7579 company manufactures 31,000 units of part T-25 each year. The company's cost per unit for part T-25 is:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead.
Total cost per part
$ 3.50
8.00
2.50
6.00
$20.00
An outside supplier has offered to sell 31,000 units of part T-25 each year to Han-7579 for $18 per unit. If Han-7579 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 $81,000. However, Han-
7579 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?
O $17,000
Ⓒ$19,000
O $21,000
O $22,000
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