Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 45,000 parts is$105,000.00, which includes fixed costs of $50,000.00 and variable costs of $55,000.00. The company can buy the part from anoutside supplier for $1.00 per unit and avoid 20% of the fixed costs. Assume that the company can use the freed manufacturing spaceto make another product that can earn a profit of $17,000.00. If Voltaic outsources, what will be the effect on operating income?OA. decrease of $37,000.00B.increase of $37,000.00C.increase of $17,000.00OD. decrease of $10,000.00...

Make or buy is one of the decision making analysis. It is one of methods as per which the entity…

Answered: Voltaic Electronics uses a standard…

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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