Your Company makes 35,000 motors to be used in the production of its sewing machines. The cost per motor at this level of activity is: Direct materials $4.50 Direct labor $4.60 Variable manufacturing overhead $3.75 Fixed manufacturing overhead $3.40 An outside supplier has offered to supply all the motors the company needs for $15 each. If Your Company decides to buy the motors, there would be no other use for the production facilities and 25% of the fixed manufacturing overhead cost could be avoided. If Your Company decides to buy the motor, what is the change in net income net operating income? OA $45,500 O B.S 14.000 OC. (S14.000) O D.(545.500)

Your Company makes 35,000 motors to be used in the production of its sewing machines. The cost per motor at this level of activity is: Direct materials $4.50 Direct labor $4.60 Variable manufacturing overhead $3.75 Fixed manufacturing overhead $3.40 An outside supplier has offered to supply all the motors the company needs for $15 each. If Your Company decides to buy the motors, there would be no other use for the production facilities and 25% of the fixed manufacturing overhead cost could be avoided. If Your Company decides to buy the motor, what is the change in net income net operating income? OA $45,500 O B.S 14.000 OC. (S14.000) O D.(545.500)

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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