question 22

Question 22 (3 points) Thor Company fabricates massive hammers. Each hammer includes one case, which is currently made in-house. Details of the case fabrication are as follows: Volume 900 units per month Variable cost per unit $6 per unit Fixed costs $16,000 per month Another factory has offered to supply Thor with ready-made units for a price of $13 per case. Assume that Thor's fixed costs are unavoidable, but that Thor could use the vacated production facilities to earn an additional $9.500 of profit per month If Thor decides to outsource, monthly operating income will increase by $3,200 decrease by $16,000 increase by $9,500 decrease by $26,600