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Bramble Corp. produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 50000 Direct labor 155000

Bramble Corp. produces 5000 units of part A12E. The following costs were incurred for that level of production:

Direct materials $ 50000
Direct labor 155000
Variable overhead 70000
Fixed overhead 175000

If Bramble buys the part from an outside supplier, $60000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $75, net income will increase (decrease) by

$(40000).

$140000.

$(100000).

$85000.

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