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11. Fernwood Fan Co. produces a product (fan) part. The following costs are being incurred for production of the 400 units of the part needed
11. Fernwood Fan Co. produces a product (fan) part. The following costs are being incurred for production of the 400 units of the part needed for January manufacturing operations: Direct materials $ 4,400 Direct labor $ 5,400 Total Factory overhead cost $3,000 An outside supplier offers to provide 400 parts for a purchase cost of $30 per unit. Note: Fixed factory overhead cost, which is 40% of total factory overhead cost, will be unaffected by the decision to purchase the part from the outside supplier Calculate the increase or decrease in January Net Income if the 400 parts are purchased for $30 per unit
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