Fastec Automobile Company fabricates automobiles.Each vehicle includes one transfer case,which is currently made in-house.Details of the transfer case fabrication are as follows:
A Korean factory has offered to supply Fastec with ready-made units for a price of $13 per transfer case.Assume that Fastec's fixed costs are unavoidable,but that Fastec could use the vacated production facilities to earn an additional $9500 of profit per month.If Fastec decides to outsource,monthly operating income will ________.
A) increase by $3200
B) decrease by $16,000
C) increase by $9500
D) decrease by $26,600
Correct Answer:
Verified
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