Lion Company makes 10,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 13.2 Direct labor 20.8 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 10.90 Unit product cost 47.90 An outside supplier has offered to sell the company all of these parts it needs for $42.30 a unit. $6.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. (a). What is the net total dollar advantage or disadvantage of purch
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Home » Business » Lion Company makes 10,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 13.2 Direct labor 20.8 Variable manufacturing overhead 3.