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Clemente Inc incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8.400 Direct labor 11.250 Variable overhead 12,600 Fixed overhead 16,200

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Clemente Inc incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8.400 Direct labor 11.250 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit. If Clemente accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3,600 The increase (decrease) in net income from accepting the offer would be O A $150 O 3.5(3.600) OCS(150)

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