Required: Prepare computations showing how much profits will increase or decrease if the outside suppliers offer is accepted! Please explain your answer!

1. Oxy Products manufactures 30,000 units of gold each year for use on its production line. At this level of activity, the cost per unit for gold is: Direct materials $ 4 Direct labor ..... $12 Variable manufacturing overhead $5 Fixed manufacturing overhead $12 Total cost per part $25 An outside supplier has offered to sell 20,000 units of gold each year to Oxy Products for $21 per part. If Oxy Products accepts this offer, the facilities now being used to manufacture part gold could be rented to another company at an annual rental of $100,000. However, Oxy Products has determined that two-thirds of the fixed manufacturing overhead being applied to part gold would continue even if part gold were purchased from the outside supplier