Zortex, Inc. had been making a component for one of its products, but is now considering outsourcing the component to a Japanese company, which has offered to sell an unlimited quantity of components for $5 per unit. If Zortex outsources, it could shut down a whole department and rent the building for $1,500 per month. The cost of making the component is $4.25 per unit, which includes $2.00 of fixed costs, of which only $1.50 per unit can be avoided if the department is shut down. Zortex currently produces about 1,000 units per month. What is the cost advantage or disadvantage of per unit of outsourcing the component?

Select one:

A.$1.50 disadvantage

B.$0.75 disadvantagewrong

C.$0.25 advantage

D.$0.50 advantage wrong