3 ILFmakes 2,000 waterproof mattresses annually tobe used in one of its products. The unit cost of the mattresses includes variable costs of $45 and fixed costs of $30. If the mattresses were purchased from an outside supplier, 60% of the fixed costs could be eliminated. Buying mattresses from an outside supplier at a price of $50 each would cause ILF's operating income to a Increase by $26,000 b Increase by $30,000 c Increase by $6,000 d Decrease by $10,000 4 The decision to rework a defective branch of products will improve net income whenever the incremental revenue earned as a result of the decision exceeds a The variable costs of reworking the batch. b The incremental cost of reworking the batch. c The average cost per unit associated with reworking the batch. The cash expenditure to rework the batch