Zoomer Company produces Optimist sailboats. The costs of producing 100,000 tiller extensions for use in the boats are as follows: Direct labor $250,000 Direct materials 300,000 Variable overhead 65,000 Fixed overhead 185,000 An outside supplier has offered to supply the tiller extensions for $720,000. If Zoomer accepts the offer $85,000 of fixed costs can be avoided. What is the financial advantage (disadvantage) of accepting the supplier's offer?
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Home » Business » Zoomer Company produces Optimist sailboats. The costs of producing 100,000 tiller extensions for use in the boats are as follows: Direct labor $250,000 Direct materials 300,000 Variable overhead 65,000 Fixed overhead 185,000 An outside supplier has