Waterway Industries incurs the following costs to produce 10600 units of a subcomponent: Direct materials $8904 Direct labor 11978 Variable overhead 13356 Fixed overhead 16200 An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit. If Waterway accepts the offer, by how much will net income increase (decrease)? a. $(3074) b. $(9328) c. $4028 d. $20228
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Waterway Industries incurs the following costs to produce 10600 units of a subcomponent:
Direct materials $8904
Direct labor 11978
Variable
Fixed overhead 16200
An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit.
If Waterway accepts the offer, by how much will net income increase (decrease)?
a. $(3074)
b. $(9328)
c. $4028
d. $20228
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