(Solved):Han Products manufactures 28,000 units of part S-6 each year for use on its production line. At…

 

Question

Han Products manufactures 28,000 units of part S-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: $5.70

Direct labor: 7.00

Variable manufacturing overhead: 4.00

Fixed manufacturing overhead: 12.00

Total cost per part: $28.70

An outside supplier has offered to sell 28,000 units of part S-6 each year to Han Products for $49.50 per part. If Han Products accepts this offer, the

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