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Marigold Corp. incurs the following costs to produce 11000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead O $10350. O $(3150). O $3150. $8800 13000 13000 An outside supplier has offered to sell Marigold the subcomponent for $2.55 a unit. No fixed overhead costs are avoidable. If Marigold accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be $(3600). 19200

Marigold Corp. incurs the following costs to produce 11000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead O $10350. O $(3150). O $3150. $8800 13000 13000 An outside supplier has offered to sell Marigold the subcomponent for $2.55 a unit. No fixed overhead costs are avoidable. If Marigold accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be $(3600). 19200

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Marigold Corp. incurs the following costs to produce 11000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $8800 13000 13000 19200 An outside supplier has offered to sell Marigold the subcomponent for $2.55 a unit. No fixed overhead costs are avoidable. If Marigold accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $10350. O $(3150). O $3150. ● $(3600).
Transcribed Image Text:Marigold Corp. incurs the following costs to produce 11000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $8800 13000 13000 19200 An outside supplier has offered to sell Marigold the subcomponent for $2.55 a unit. No fixed overhead costs are avoidable. If Marigold accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $10350. O $(3150). O $3150. ● $(3600).
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