ABC Company just received an offer from a basket ball club to purchase jerseys. The company has the capacity to produce the order. Below is the information pertaining to the offer.

ABC Company just received an offer from a basket ball club to purchase jerseys. The company has the capacity to produce the order. Below is the information pertaining to the offer. Sale price of the offer 15.00 Quantity of order 100 Jerseys Below is the per unit sale price and production costs of the jerseys: Sale price 18.00 Direct materials 10.00 Direct labor 1.50 Variable overhead 0.50 Annual fixed cost 8,000 Annual sales volume 2,000 Required a) Compute the change in operating income if the order were (6 Marks) accepted.ABC Company manufactures machinery parts to be used in its various products. One of the parts manufactured is H12. The production cost per unit for H12 based on annual production requirement is as follows: Direct materials 4.50 Direct labor 3.00 Variable overhead 2.00 Fixed overhead 3.50 Annual production requirement 35,000 units 70,000 of the total fixed overhead is direct fixed overhead and the remaining is common fixed overhead. An outside supplier has offered to sell the part to the company for: $ 12.00 Required: b) Compute the annual impact on the company's (4 Marks) net income as a result of buying the part from the outside supplier