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McAlister Corporation incurs the following annual costs in producing 30,000 floppy drives for computers. Direct Materials $60,000 Direct Labor $100,000 Variable manufacturing overhead $80,000 Fixed

McAlister Corporation incurs the following annual costs in producing 30,000 floppy drives for computers. Direct Materials $60,000

Direct Labor $100,000

Variable manufacturing overhead $80,000

Fixed manufacturing overhead $90,000

Total manufacturing costs $330,000

However, if McAlister purchases the floppy drives from another company at a price of $10, what is the increase or (decrease) in net income for McAlister?

a. ($90,000)

b. ($60,000)

c. $30,000

d. $60,000

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