Top Posters
Since Sunday
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
Deprecated Deprecated
wrote...
Go to Answer
Posts: 2784
Rep: 104 0
7 years ago
Value Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 25,000 parts is $95,000, which includes fixed costs of $40,000 and variable costs of $55,000. The company can buy this part from an external supplier for $3 per unit and avoid 20% of the fixed costs. If Value Electronics decides to outsource the production of the part, how will it impact its operating income?
A) Operating income increases by $20,000.
B) Operating income decreases by $12,000.
C) Operating income increases by $12,000.
D) Operating income decreases by $20,000.
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
Read 309 times
2 Replies
Replies
Answer verified by a subject expert
.unplugged..unplugged.
wrote...
#1
Top Poster
Posts: 1272
Rep: 267 0
7 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

Deprecated Author
wrote...
#2
7 years ago
This was certainly a tough question, loving the expertise
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  951 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1480
  
 291
  
 241
Your Opinion
Which is the best fuel for late night cramming?
Votes: 146
Previous poll results: How often do you eat-out per week?