Question $10$

$4$ pts

Copr. Goedl EcoFriendly Products currently makes a product in house. Costs to make the product are: direct materials, $$12\mathrm{.}20$; direct labor, $$15\mathrm{.}80$; manufacturing overhead, $$6\mathrm{.}60.$ An outside supplier has offered to sell them the product for $$30$ per unit. Direct material and direct labor are traceable to the product and would be eliminated. Of the $$6\mathrm{.}60$ of overhead $$3\mathrm{.}90$ is variable could be eliminated. They currently produce $1,000$ units. What would be the effect of purchasing from and outside supplier?

$$1,900$

$$(1,900)$

$$4,600$

$$(4,600)$