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The Yankee Candle Corporation makes wax that it uses in the production of candles. Yankee Candle's costs to produce 100,000 ounces of wax annually are:

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The Yankee Candle Corporation makes wax that it uses in the production of candles. Yankee Candle's costs to produce 100,000 ounces of wax annually are: Direct materials... Direct labor.. Variable manufacturing overhead...... Fixed manufacturing overhead..... $30,000 $50,000 $20,000 $70,000 An outside supplier has offered to sell wax to Yankee Candle for $1.25 per ounce. If the wax is purchased from the outside supplier, Yanke Candle will avoid $15,000 of annual fixed overhead costs and will be able to earn an additional $45,000 per year by repuprosing the facilities it currently uses to make wax. Direct labor is a variable cost. If Yankee Candle chooses to buy the wax from the outside supplier, then annual net operating income would: increase by $35,000 increase by $45,000. decrease by $10,000 increase by $70,000

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