The Phone Company makes microchips that it uses in the phones it manufactures. The company uses 17,000 microchips annually in the production of phones. The costs to make the microchips are Materials Labor Variable Overhead Fixed Overhead Total relevant costs Cost to buy $ 8.90 A potential supplier has offered to sell to The Phone Company identical microchips for $52.40 each. If the microchips are purchased, half of the fixed overhead could be avoided. If The Phone Company accepts the offer, what will the effect on profit be? NOTE: Enter amounts rounded to the nearest whole dollar. Recommendation $24.50 $ 16.00 6.40 I per microchip per microchip per microchip per microchip Effect of buying rather than making 0 in profit

A potential supplier has offered to sell to The Phorie Companyidentical microchips for $52.40 each. If the microchips are purchased, hall of the fixed overhead could be avoided, it The Phone Company accepts the offer, what will the effect on pront be? NOTE: Enter amounts rounded to the nearest whole dollar