Priestly Automobiles Company fabricates automobiles. Each vehicle includes one wiring harness, which is currently made in-house. Details of the harness fabrication are as follows: Volume 700 units per month Variable cost per unit $7 per unit Fixed costs $16,000 per month An Indonesian factory has offered to supply Priestly with ready-made units for a price of $14 per wiring harness. Assume that Priestly's fixed costs are unavoidable, but that Priestly could use the vacated production facilities to earn an additional $9,500 of profit per month. If Priestly decides to outsource, monthly operating income will ________. A. increase by $4,600 B. decrease by $24,200 C. increase by $9,500 D. decrease by $16,000

Candy Man, Inc. reports the following information:

Beginning Finished Goods Inventory	60	units
Units produced	550	units
Units sold	610	units
Sales price	$130	per unit
Direct materials	$17	per unit
Direct labor	$10	per unit
Variable manufacturing overhead	$17	per unit
Fixed manufacturing overhead	$14,000	per year
Variable selling and administrative costs	$6	per unit
Fixed selling and administrative costs	$12,500	per year

What is the unit product cost using variable costing? (Round your answer to the nearest cent.)

A.

$98.18

B.

$44.00

C.

$52.45

D.

$69.45