Chetek Industries manufactures 15,000 components per year.The manufacturing cost of the components was determined to be as follows: Assume Chetek Industries could avoid $40,000 of fixed manufacturing overhead if it purchases the component from an outside supplier.An outside supplier has offered to sell the component for $34.If Chetek purchases the component from the supplier instead of manufacturing it,the effect on income would be a
A)$60,000 increase
B)$10,000 increase
C)$100,000 decrease
D)$140,000 increase

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The Answer of Chetek Industries manufactures 15,000 components per year.The manufacturing cost of the components was determined to be as follows: Assume Chetek Industries could avoid $40,000 of fixed manufacturing overhead if it purchases the component from an outside supplier.An outside supplier has offered to sell the component for $34.If Chetek purchases the component from the supplier instead of manufacturing it,the effect on income would be a
A)$60,000 increase
B)$10,000 increase
C)$100,000 decrease
D)$140,000 increase

Chetek Industries Manufactures 15,000 Components Per Year