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A company produces 500 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures the circuits in-house but is
A company produces 500 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures the circuits in-house but is considering outsourcing the circuits at a contract cost of $28 each. Currently, the cost of producing circuits in-house includes variable costs of $24 per circuit and fixed costs of $6,000 per month. Assume the fixed costs are unavoidable but that company could employ the vacated premises to earn rental income of $4,300 per month. If the company outsources. monthly operating income will: OA. decrease by $14,000 OB. increase by $26,000 OC. decrease by $2,000 4: OD. increase by $2,300
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