ch. 12

ework Saved Exercise 12-11 Make or Buy Decision (L012-3) Han Products manufactures 33.000 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 $ 3.70 1e.ee 2.3e 12.ee $ 28.ee An outside supplier has offered to sell 33,000 units of part S-6 each year to Han Products for $22 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $83,000. 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