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Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $140,000, which includes
Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $140,000, which includes fixed costs of $80,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3.00 per unit and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If the company makes the part, what will its operating income be? OA. $68,000 greater than if the company bought the part OB. $224,000 greater than if the company bought the part OC. $84,000 less than if the company bought the part OD. $84,000 greater than if the company bought the part Click to select your answer
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