NORMZ Co. manufactures lampshades for the lamps it makes. Variable Manufacturing Overhead is applied at 70% of Direct Labor. It manufactures 30,000 lamps per year. Direct Material is $4 per unit, and Direct labor is $5 per unit. A supplier offers to sell lampshades to NORMZ for $12.75 per unit. If NORMZ buys rather than makes the shades, all variable overhead cost will be eliminated, but the $45,000 of fixed overhead will remain. What is the effect on Net Income if NORMZ buys rather than makes the shades? A. $7500 decrease B. $7500 increase C. $37500 decrease D. $37500 increase E. No change-same under both scenarios (23) Refer to question #22 above. If the lampshades are purchased, and NORMZ can use its excess capacity to manufacture another product that will produce $25,000 of net income, what effect on Net Income from buying the shades? A. $37500 decrease B. $37500 increase C. $17500 decrease D. $17500 increase E. No change-same under both scenarios 24) DEXTER Inc. makes unfinished bookcases that it sells for $62. Fixed costs are $10 and variable costs are $36 per unit. The company could finish the bookcases and sell them for $70. An additional $7 per unit variable cost will be incurred without any increase in fixed costs. If it decides to finish 10,000 bookcases, what is the effect on Net Income? $20000 decrease $20000 increase $10000 decrease $10000 increase change same under both scenarios