Sharp Corporation Produces 8,000 Parts Each Year, Which Are Used

Multiple Choice

Sharp Corporation produces 8,000 parts each year, which are used in the production of one of its products. The unit product cost of a part is $36, computed as follows: The parts can be purchased from an outside supplier for only $28 each. The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

A) $24,000
B) ($24,000)
C) $56,000
D) ($56,000)