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Bonita Industries incurs the following costs to produce 11100 units of a subcomponent: Direct materials $9324 Direct labor 12543 Variable overhead 13986 Fixed overhead 16200
Bonita Industries incurs the following costs to produce 11100 units of a subcomponent: Direct materials $9324 Direct labor 12543 Variable overhead 13986 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 $3600. The increase (decrease) in net income from accepting the offer would be
a)$(618).
b)$(3600).
c)$7818.
d)$618.
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