Top Posters
Since Sunday
5
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
bernie2981 bernie2981
wrote...
Go to Answer
Posts: 3810
Rep: 26 0
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.

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If Harvey Automobiles makes the part, what will its operating income be?
A) $54,000 greater than if the company bought the part
B) $30,000 greater than if the company bought the part
C) $150,000 greater than if the company bought the part
D) $30,000 less than if the company bought the part
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 653 times
3 Replies
Replies
Answer verified by a subject expert
nucleinuclei
wrote...
#1
Top Poster
Posts: 2158
Rep: 418 0
8 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

bernie2981 Author
wrote...
#2
8 years ago
Wow! Thank you
wrote...
#3
3 years ago
Thanks!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1281 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1063
  
 250
  
 281
Your Opinion
Previous poll results: Do you believe in global warming?