Marquette Company currently produces all its product components.Another firm has offered to supply the casings at $6 each.Marquette's total cost per casing is as follows: The fixed overhead is based on production of 3,000 casings,and none of it would be eliminated if Marquette accepted the offer.By how much would profit change if Leggier accepts this offer and purchases 3,000 casings?
A)$7,500 increase
B)$9,900 decrease
C)$5,400 increase
D)$300 decrease

Question

Marquette Company currently produces all its product components.Another firm has offered to supply the casings at $6 each.Marquette's total cost per casing is as follows:  The fixed overhead is based on production of 3,000 casings,and none of it would be eliminated if Marquette accepted the offer.By how much would profit change if Leggier accepts this offer and purchases 3,000 casings?
A)$7,500 increase 
B)$9,900 decrease 
C)$5,400 increase 
D)$300 decrease

Quizplus · Accepted Answer

The Answer of Marquette Company currently produces all its product components.Another firm has offered to supply the casings at $6 each.Marquette's total cost per casing is as follows:  The fixed overhead is based on production of 3,000 casings,and none of it would be eliminated if Marquette accepted the offer.By how much would profit change if Leggier accepts this offer and purchases 3,000 casings?
A)$7,500 increase 
B)$9,900 decrease 
C)$5,400 increase 
D)$300 decrease

Marquette Company Currently Produces All Its Product Components