Miramax Company Makes a Semi-Finished Car Parts for the Automobile

Miramax Company makes a semi-finished car parts for the automobile industry that has a unit contribution margin of $125 to Miramax. A major customer, Delphi Car Parts, has been purchasing 50 units per month from Miramax for many years, but has indicated that it would prefer to purchase them already machined to its specifications. Delphi has offered to pay an additional $25 per unit for the finished units. To meet those specifications, Miramax would have to rent additional equipment at a cost of $1,000 per month and incur labor and other direct costs of $8 per unit.
Calculate advantage or disadvantage of further processing for Miramax.

A) $350 advantage
B) $150 advantage
C) $500 advantage
D) $150 disadvantage