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Question 17, EB-27A (final answer) Part 1 of 2 Barney Enterprises manufactures one of the components used to assemble its main company product. Specialty
Question 17, EB-27A (final answer) Part 1 of 2 Barney Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $12.20 per unit. Barney Enterprises' current cost is $14.75 per unit of the component, based on the 125,000 components that Barney Enterprises currently produces Read the requirements. HW Score: 80.57%, 40.29 of 50 points Points: 0 of 3 This current cost per unit is based on the following calculations: (Click the icon to view the information) Sa None of Barney Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This i product would be expected to generate $32,000 of contribution margin per year. Requirement 1. If Bamey Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? increase by 5 If Barney Enterprises outsources the manufacturing of the component, operating income will
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