v A1 B C fx Alanco, Inc. manufactures a variety of products and is currently maunfacturing all E F G H 1 Alanco, Inc. manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: I 4 5 $ 4.00 Direct materials 6 6.00 Direct labor 7 2.00 Variable manufacturing overhead 8 Fixed manufacturing overhead, traceable* 5.00 9 Fixed manufacturing overhead, common but allocated 8.00 10 Total cost 25.00 11 12 Supplier price $ 21.00 13 14 Units used per year 12,000 15 16 *Fixed manufacturing overhead, traceable is composed of two items: 17 Depreciation of equipment (no resale value) 30% 18 Supervisor salary 70% 19