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Bonita Industries incurs the following costs to produce 10500 units of a subcomponent: Direct materials $8820 Direct labor 11865 Variable overhead 13230 Fixed overhead 16200
Bonita Industries incurs the following costs to produce 10500 units of a subcomponent:
Direct materials $8820
Direct labor 11865
Variable overhead 13230
Fixed overhead 16200
An outside supplier has offered to sell Bonita the subcomponent for $2.85 a unit.
If Bonita accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be
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