Coronado Industries incurs the following costs to produce 9100 units of a subcomponent: Direct materials $7644 Direct labor 10283 Variable overhead 11466 Fixed overhead 16200 An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. If Coronado could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $(1724). $6458. $458. $(5639).

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Coronado Industries incurs the following costs to produce 9100 units of a subcomponent:

Direct materials $7644
Direct labor 10283
Variable overhead 11466
Fixed overhead 16200


An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit.

If Coronado could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by

$(1724).
$6458.
$458.
$(5639).
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