Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder.An outside supplier has offered to sell Green all of these parts for $48 a unit.If the parts were purchased from the supplier,all of the direct labor costs would be avoided as well as $5 of manufacturing overhead costs per unit.Product cost information for the part under review follows: If Green has no other use for the space vacated by the decision to purchase the part from the outside supplier,what is the net total dollar advantage (disadvantage)of purchasing the part rather than making it?
A) $210,000.
B) $60,000.
C) ($210,000).
D) ($90,000)

Question

Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder.An outside supplier has offered to sell Green all of these parts for $48 a unit.If the parts were purchased from the supplier,all of the direct labor costs would be avoided as well as $5 of manufacturing overhead costs per unit.Product cost information for the part under review follows:  If Green has no other use for the space vacated by the decision to purchase the part from the outside supplier,what is the net total dollar advantage (disadvantage)of purchasing the part rather than making it?
A) $210,000. 
B) $60,000. 
C) ($210,000). 
D) ($90,000)

Quizplus · Accepted Answer

The Answer of Green Manufacturing makes 30,000 units per year of a part used in the manufacture of its new camcorder.An outside supplier has offered to sell Green all of these parts for $48 a unit.If the parts were purchased from the supplier,all of the direct labor costs would be avoided as well as $5 of manufacturing overhead costs per unit.Product cost information for the part under review follows:  If Green has no other use for the space vacated by the decision to purchase the part from the outside supplier,what is the net total dollar advantage (disadvantage)of purchasing the part rather than making it?
A) $210,000. 
B) $60,000. 
C) ($210,000). 
D) ($90,000)

Green Manufacturing Makes 30,000 Units Per Year of a Part