Sheridan Industries must decide whether to make-or-buy some of its components. The costs of producing 161000 battery packs for its product are as follows: Direct Materials $13800 Direct Labor $4600 Variable overhead $5520 Fixed overhead $8280 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $1840 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs? ○ An increase in net income of $3220. ○ A decrease in net income of $3220. ○ An increase in net income of $6440. O An increase in net income of $5060.
Sheridan Industries must decide whether to make-or-buy some of its components. The costs of producing 161000 battery packs for its product are as follows: Direct Materials $13800 Direct Labor $4600 Variable overhead $5520 Fixed overhead $8280 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $1840 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs? ○ An increase in net income of $3220. ○ A decrease in net income of $3220. ○ An increase in net income of $6440. O An increase in net income of $5060.
Sheridan Industries must decide whether to make-or-buy some of its components. The costs of producing 161000 battery packs for its product are as follows: Direct Materials $13800 Direct Labor $4600 Variable overhead $5520 Fixed overhead $8280 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $1840 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs? ○ An increase in net income of $3220. ○ A decrease in net income of $3220. ○ An increase in net income of $6440. O An increase in net income of $5060.
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Transcribed Image Text:Sheridan Industries must decide whether to make-or-buy some of its components. The costs of producing 161000 battery packs for its
product are as follows:
Direct Materials
$13800
Direct Labor
$4600
Variable overhead
$5520
Fixed overhead
$8280
The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $1840
of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs?
○ An increase in net income of $3220.
○ A decrease in net income of $3220.
○ An increase in net income of $6440.
O An increase in net income of $5060.
Definition Definition Structural system an enterprise uses to collect, store, report, retrieve, and process financial data. Accounting information systems are used by business analysts, auditors, accountants, and consultants for accurate and efficient access to financial data.
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