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Marigold Corp. produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 55000 Direct labor 160000

Marigold Corp. produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $ 55000 Direct labor 160000 Variable overhead 75000 Fixed overhead 175000 If Marigold buys the part from an outside supplier, $20000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $65, net income will increase (decrease) by $85000. $(15000). $(35000). $130000.

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