Ortega Industries manufactures 21,300 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total $ 186,000 420,000 108,000 300,000 $1,614,000 Assume Ortega Industries could avoid $130,000 of fixed manufacturing overhead if it purchases the component from an outside supplier. An outside supplier has offered to sell the component for $34. If Ortega purchases the component from the supplier instead of manufacturing it, the effect on income would be a: Multiple Choice $1198,000 decrease $1677,200 Increase $718,800 increase Vermicelli Company plans to sell 240,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 190,000 finished units in inventory on June 30. Vermicelli Company's production requirement in units of finished product for the three-month period ending September 30 is: (CMA adapted) Multiple Choice 756,600 units 843.734 units o 788,864 units. 806,800 units