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Speed Quest Inc

Question 16

Multiple Choice

Speed Quest Inc. manufactures speed boats. Currently, the company manufactures its own engine for the boats at the following unit costs: Speed Quest Inc. manufactures speed boats. Currently, the company manufactures its own engine for the boats at the following unit costs: Another manufacturer has offered to supply Speed Quest with the engine at a cost of $85 each. Speed Quest currently makes 1,000 boats annually. If Speed Quest accepts the offer, what will be the short-term impact on net income? A) Decrease of $5,000. B) Increase of $15,000. C) Decrease of $85,000. D) Increase of $20,000. Another manufacturer has offered to supply Speed Quest with the engine at a cost of $85 each. Speed Quest currently makes 1,000 boats annually. If Speed Quest accepts the offer, what will be the short-term impact on net income?


A) Decrease of $5,000.
B) Increase of $15,000.
C) Decrease of $85,000.
D) Increase of $20,000.

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