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bernie2981 bernie2981
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8 years ago
Cuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of $70,000. The company can buy the part from an outside supplier for $3.50 per unit, and avoid 30% of the fixed costs.

If Cuyahoga Valley Bicycles makes the part, how much will its operating income be?
A) $45,600 less than if the company bought the part
B) $47,600 greater than if the company bought the part
C) $90,400 less than if the company bought the part
D) $49,600 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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#2
8 years ago
Answers my question perfectly.
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