Question 15 ABC Inc. incurs the following costs to produce 10,000 units of a subcomponent Direct materials $28.000 Direct labor 37.500 Variable overhead 42,000 Fixed overhead 54.000 An outside supplier has offered to sell ABC the subcomponent for $9.50 a unit. If ABC accepts the offer, by how much will net income increase (decrease)? A S(29,500) B. $12,500 C. S(12,500) D. $66,500