Az Corporation produces 10,000 parts each year, which are used in the production of One of its products. The unit product cost of a part is $36, computed as follows: Variable production cost $ 16 Fixed production cost 20 Unit product cost $ 36 The parts can be purchased from an outside supplier for only $26 each. The space in which the parts are now produced would be idle and fixed production costs would be reduced by one fourth. 

Based on these data, What would be the financial advantage (disadvantage) of purchasing the parts from the outside supplier?

 

 

Answer rating: 100% (QA)

To determine the financial advantage or disadvantage of purchasing the parts from an outside supplie... View the full answer