Han Products manufactures 21,000 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 $ 3.50
Direct labor 9.00
Variable manufacturing overhead 2.50
Fixed manufacturing overhead 9.00
Total cost per part $ 24.00
An outside supplier has offered to sell 21,000 units of part S-6 each year to Han Products for $20 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $71,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.

Required:

What is the financial advantage (disadvantage) of accepting the outside supplier’s offer?

Net savings of buying from outside supplier                       $ 29,000

Explanation:

Computations from buying S 6 from outside supplier.

Costs to produce in house -                                                  $ 24 per unit

Units produced                                                                       21,000 units

Total costs to produce in house ( 21,000 units * $ 24)        $ 504,000

Total costs to buy from outside ( 21,000 units * $ 20)         $ 420,000

Savings on buying from outside                                            $  84,000

Adjustments of costs

Continuing Fixed manufacturing overhead

( $ 9 * 21,000 units) * 2/3                               $ 126,000

Rental Income of manufacturing facilities     $  71,000            

Continuing costs                                                                    $ 55,000  

Net savings of buying from outside supplier                       $ 29,000

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

answer; ///blank(1) 75%; blank(2) 40%;