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Han Products manufactures 19,000 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 as follows:

Han Products manufactures 19,000 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 as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $5.20 5.00 2.40 12.00 $24.60 An outside supplier has offered to sell 19,000 units of part S-6 each year to Han Products for $47.00 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 $574,600. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: (a) What is the total amount of avoidable costs if Han buys the units from an outside supplier? (Omit the "$" sign in your response.) Total cost (b) How much will profits increase or decrease if the outside supplier's offer is accepted? (Input the amount as positive value. Omit the "$" sign in your response.) Profits would (Click to select) 4 jby

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