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Rojas Manufacturing incurs the following costs to make 1,000 units of a sub-assembly part for its finished product. Direct materials $ 10,000 Direct labor 6,000
Rojas Manufacturing incurs the following costs to make 1,000 units of a sub-assembly part for its finished product. Direct materials $ 10,000 Direct labor 6,000 Variable overhead 8,000 Fixed overhead 12,000 An outside supplier offers to make 1,000 of the sub-assembly part at $25 per unit plus $1,000 shipping charges. If the offer is accepted, Rojas will be able to reduce fixed costs by $4,000. What should Rojas do? o Accept the supplier's offer because net income will increase by $10,000. O Accept the supplier's offer because net income will increase by $ 1,000. 0 Accept the supplier's offer because net income will increase by $11,000. Accept the supplier's offer because net income will increase by $ 2,000
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