The financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: $3.
Using this formula
Financial advantage (disadvantage) = Relevant manufacturing cost saving - Cost from outside supplier
Let plug in the formula
Financial advantage (disadvantage)= {$9 + $5 + $1 + ($5 x 60%)} - $15
Financial advantage (disadvantage)={$9 + $5 + $1 + $3} - $15
Financial advantage (disadvantage)= $18 - $15
Financial advantage (disadvantage)= $3
Inconclusion the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be: $3.
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