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Cotton Corp. currently makes 9,200 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing

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Cotton Corp. currently makes 9,200 subcomponents a year in one of its factories. The unit costs to produce are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Per unit $23.00 29.00 20.00 12.00 $84.00 An outside supplier has offered to provide Cotton Corp, with the 9,200 subcomponents at an $93.00 per unit price. Fixed overhead Is not avoidable. If Cotton Corp. accepts the outside offer, what will be the effect on short-term profits? Multiple Choice $110,400 Increase $193,200 decrease no change $66.240 increase

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