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McGraw Company uses 6,000 units of Part X each year as a component in the...

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Accounting

McGraw Company uses 6,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $113,000, computed as follows:
Direct materials $ 18,000
Direct labor 34,000
Variable manufacturing overhead 12,000
Fixed manufacturing overhead 49,000
Total cost $ 113,000
An outside supplier has offered to provide Part X at a price of $18.40 per unit. If McGraw Company stops producing the part internally, one-third of the fixed manufacturing overhead would be eliminated. Assume that direct labor is a variable cost.
Required:
Prepare an analysis showing the annual financial advantage or disadvantage of accepting the outside supplier's offer.
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