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bernie2981 bernie2981
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8 years ago
Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs.

If Harvey Automobiles makes the part, how much will its operating income be?
A) $78,000 greater than if the company bought the part
B) $78,000 less than if the company bought the part
C) $42,000 less than if the company bought the part
D) $42,000 greater than if the company bought the part
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Managerial Accounting

Managerial Accounting


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nucleinuclei
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bernie2981 Author
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8 years ago
You're such a dedicated member, I very much appreciate the help.

Marking this solved ✓
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7 years ago
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