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Sheridan Company incurs the following costs to produce 11500 units of a subcomponent: Direct materials $9000 Direct labor 11750 Variable overhead 12500 Fixed overhead
Sheridan Company incurs the following costs to produce 11500 units of a subcomponent: Direct materials $9000 Direct labor 11750 Variable overhead 12500 Fixed overhead 18000 An outside supplier has offered to sell Sheridan the subcomponent for $2.00 a unit. No fixed overhead costs are avoidable. If Sheridan accepts the offer, by how much will net income increase (decrease)? $28250 $(2250) $10250 $(2750)
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