Clemente Inc.incurs the following costs to produce 10,000 units of a subcomponent: $$\begin{array} { l l }
\text { Direct materials } & \$ 8,400 \
\text { Direct labor } & 11,250 \
\text { Variable overhead } & 12,600 \
\text { Fixed overhead } & 16,200
\end{array}$$ An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
- If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by

Question

Clemente Inc.incurs the following costs to produce 10,000 units of a subcomponent: $$\begin{array} { l l } 
\text { Direct materials } & \$ 8,400 \
\text { Direct labor } & 11,250 \
\text { Variable overhead } & 12,600 \
\text { Fixed overhead } & 16,200
\end{array}$$ An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
- If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by

Quizplus · Accepted Answer

The Answer of Clemente Inc.incurs the following costs to produce 10,000 units of a subcomponent: $$\begin{array} { l l } 
\text { Direct materials } & \$ 8,400 \
\text { Direct labor } & 11,250 \
\text { Variable overhead } & 12,600 \
\text { Fixed overhead } & 16,200
\end{array}$$ An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
- If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by

Clemente Inc An Outside Supplier Has Offered to Sell Clemente the Subcomponent