Supler Company produces a part used in the manufacture of one of its products. The unit product cost is $18, computed as follows:
- Direct materials = $8
- Direct labor = $4
- Variable manufacturing overhead = $1
- Fixed manufacturing overhead = $5
- Unit product cost = $18
An outside supplier has offered to provide the annual requirement of 4,000 of the parts for only $14 each. It is estimated that 60 percent of the fixed overhead cost above could be eliminated if the parts are purchased from the outside supplier. Based on these data, the per-unit dollar advantage or disadvantage of purchasing from the outside supplier would be:
$1 disadvantage
$1 advantage
$2 advantage
$4 disadvantage
show work please