22.Hood Company produces 1,000 units of the part A11 per year. This part is used in the assembly of one of its products. The unit product cost of the part A11 is $21 per unit (variable manufacturing cost of $12 per unit and fixed manufacturing cost of $9 per unit). The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two-thirds of the fixed manufacturing costs can be eliminated. What is the annual impact on the company's overall net operating income as a result of buying the part from the outside supplier? *

a- The overall net operating income will increase by $1,000 per year.

b- The overall net operating income will decrease by $1,000 per year.

c- The overall net operating income will decrease by $2,000 per year.

d- The overall net operating income will decrease by $5,000 per year.

e- None of the above.

23. The product F500 has been considered a drag on profits at Vinson Company for some time, and the management is considering discontinuing the product altogether. Given below is data taken from the companys accounting system in relation to the sales and the variable expenses associated with this product along with all the fixed expenses. Further investigation has revealed that $41,000 of the fixed manufacturing expenses and $25,000 of the fixed selling and administrative expenses are avoidable if the product F500 is discontinued. What is the effect on the company's overall net operating income if the product F500 is dropped? *

a-The overall net operating income will decrease by $10,000.

b-The overall net operating income will increase by $10,000.

c- The overall net operating income will decrease by $73,000.

d- The overall net operating income will increase by $73,000.

e- None of the above.

Item: Amount Sales Variable Expenses Fixed Manufacturing Expenses Fixed Selling and Administrative Expenses $240,000 $101,000 $94,000 $55,000