Variable manufecturing overhead Fixed manufacturing overhead 241S $325 athe to a labor strike, Eric is considering purchasing the subcomponents from an outside supplier for $250 per u sub n paying the 10% increase in direct labor costs demanded by the union. If Eric purchases the subcomponents with the increase in direct labor cost? a. $30,000 less b. $20,000 less c. $10,000 less d. $20,000 more Total unit cost r than from the outside supplier, how much will profit differ from what it would be if it manufactured th 23. The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows Blankets Pillows Total Sales revenue Variable ex Contribution margin $620,000 465.000 155,000 920,000 215,000 S(16.000)$63.000 $300,000 240 60,000 76.000 152000 1o2 Fixed ex 79.000 If Sweet Dreams can eliminate fixed costs of $50,000 and increase the sale of blankets by 3,000 units at a selling price of $20 per unit and a contribution margin of $5 per unit, then dropping the pillows should result in which of the following? a. Increase in total operating income of $25,000 b. Decrease in total operating income of $5,000 c. No change in total operating income d. Increase in total operating income of $5,000 It costs Michelle, Inc. $35 per unit to manufacture 1,000 units per month of a product that it can sell for $50 each. Alternatively, Michelle could process the units further into a more complex product, which would cost an additional $30 per unit. Michelle could sell the more complex product for $75 each. How would processing the product further affect Michelle's profit? a. Profit would increase by $5,000. b. Profit would increase by $25,000 24. Profit would decrease by $5,000 Profit would decrease by $25,000 c. d. CopyrightO 2018, School of Accountancy, Arizona State University U