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Sunland Company incurs the following costs to produce 10600 units of a subcomponent Direct materials Direct labor Variable overhead Fixed overhead $8904 . 11978 13356

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Sunland Company incurs the following costs to produce 10600 units of a subcomponent Direct materials Direct labor Variable overhead Fixed overhead $8904 . 11978 13356 16200 An outside supplier has offered to sell Sunland the subcomponent for $2.85 a unit. If Sunland could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by O $1028. O $7028. O $(4184) $(6074)

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