Question 18 Sheridan Company incurs the following costs to produce 9700 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $8148 10961 12222 16200 An outside supplier has offered to sell Sheridan the subcomponent for $2.85 a unit. If Sheridan accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be $86. $(3600). $7286 $(86)