mickey comapny uses 5000 units of pat Z each year as a component in the assembly of one of its products. The company is presently producing part Z internally at a total cost of 100,000 computed as follows: direct Materials 15,000 Direct Labor 30,000 Variable Manufacturing overhead 10,000 Fixed Manufacturing Overhead 45,000 Total Cost 100,000. An outsider supplier has offered to provide Part Z at a price of P18 per unit. Mikey Company stops producing the part internally, one-third of the fixed manufacturing overhead would be eliminated. Prepare an analysis showing the annual peso advantage or disadvantage of accepting the outside suppliers offer.

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