3. Valachi Company has an old machine that puts labels on bottles. Valachi can sell the old machine for $70,000 cash. The old machine has a remaining useful life of 3 years, and no residual value. A new, more efficient machine is available at a cost of $300,000 that will have a 3-year useful life with no residual value. The new machine will lower annual variable production costs from $520,000 to $440,000 per year. What will be the effect on net income for 3 years if Valachi replaces the old machine with the new machine? a. $ 60,000 decrease b. $ 10,000 increase C. $ 24,000 increase d. $310,000 increase 4. Carey Co. incurs the following product costs to produce 1,000 units of a part (subcomponent): Direct materials Direct labor Factory overhead $8,000 7,000 5,000 An outside supplier has offered to sell Carey the part for $18.85 per unit. Fixed costs are 20% of factory overhead costs and will not change as a result of accepting the offer. If Carey accepts the offer, how much will net income change? a. $1,150 increase b. $150 increase c. $1,150 decrease d. $3,850 decrease