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Adams company has the following costs when producing 100,000 units: Variable costs $400,000 Fixed costs 800,000 An outside supplier has offered to make the item
Adams company has the following costs when producing 100,000 units:
Variable costs | $400,000 |
Fixed costs | 800,000 |
An outside supplier has offered to make the item at $4.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $165,000.
What is the net increase (decrease) in the net income of accepting the suppliers offer?
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