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Coronado Industries incurs the following costs to produce 9500 units of a subcomponent: Direct materials $9000 Direct labor 11500 Variable overhead 12200 Fixed overhead

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Coronado Industries incurs the following costs to produce 9500 units of a subcomponent: Direct materials $9000 Direct labor 11500 Variable overhead 12200 Fixed overhead 16000 An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable. If Coronado accepts the offer, by how much will net income increase (decrease)? $21625 $5625 O $(6575) O $(2500)

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