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43) DC Electronics uses a standard part in the manufacture of several of its radios. The total cost producing 30,000 parts is $90,00, which includes fixed costs of $33,00 and variable costs of $57,000. The company can buy the part from an outside supplier for $2.50 per unit, and a of the fixed costs. If DC Electronics decides to outsource the production of the part, how willit impact operats income? 0 A) Up $132000 B) Down $8,100 D) Up $15,000 44) DC Electronics uses a standard part in the manufacture of several of its radios. The cost of producing 30,000 parts is $90,000, which includes fixed costs of $33,000 and variable costs of $57,000. The company can buy the part from an outside supplier for $2.50 per unit, and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can earn profit of $11,600. If DC tsources, what will the effect on operating income be A) Up $2,500 B) Up $15,000 ) Down $24900 D Up $3,400 C) Down $24,900 35o 45) CM Manufacturing has provided the following unit costs pertaining to a component they 45) manufacture and use in the production of one of their main prodycts: SIO Direct materials Direct labor (variable) 96 29, ooo Variable manufacturing overhead Fixed manufacturing overhead 24,000 29/ A supplier has offered to provide the component to CM manufacturing for $500 per unit. If CM Manufacturing were to buy the component from the supplier, they could use the released facilities to manufacture a product which would generate contribution margin of $16,000 annually Assuming that CM Manufacturing needs 2,000 components annually and the fixed manufacturing overhead is unavoidable, what would be the impact on operating income if the company outsources? A) Operating income would go up by $2,000. B) Operating income would go down by $18,000. C) Operating income would go up by $4,000 D) Operating income would go down by $12000. 46) Dong Fang Company fabricates inexpensive automobiles for sale to 3rd world countries. Each auto includes one wiring harness, which is currently made in-house. Details of the harness fabrication are as follows: Units per month x3200 Volume Variable cost per unit Fixed costs 900 $8.00 $14,000 Per unit Per month A factory in Indonesia has offered to supply Dong Fang with ready-made units for a price of $14.00 Assume that Dong Fang's fixed costs could be reduced by $5,000 if they outsource, and that Dong Fang will not be able to use the excess capacity in any profitable manner. If Dong Fang decides to outsource what will be the impact on Dong Fang's monthly operational income? B) It will go up by $8,600. D) It will go down by $14,000. by$400 own C) It will go up by 10