Question
Halley Company produces 2,000 parts each year that are used in one of its products. The unit product cost of this part is: Variable manufacturing
Halley Company produces 2,000 parts each year that are used in one of its products. The unit product cost of this part is: Variable manufacturing cost Fixed manufacturing cost Unit product cost $ 7.50 6.00 $13.50 The part can be purchased from an outside supplier for $10 per unit. If the part is purchased from the outside supplier, two-thirds of the fixed manufacturing costs can be eliminated. The effect on net operating income from purchasing the part would be a: Multiple Choice O $5,000 decrease $1,000 decrease $7,000 increase Multiple Choice $5,000 decrease $1,000 decrease $7,000 increase $3,000 increase
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