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Vaughn Co, produces 5200 units of part Alpha-E for use in one its products. The following costs are incurred at that level of production: $
Vaughn Co, produces 5200 units of part Alpha-E for use in one its products. The following costs are incurred at that level of production: $ 54000 165000 Direct materials Direct labor Variable overhead Fixed overhead 80000 178000 If Vaughn buys the part from an outside supplier, $46000 of the fixed overhead is avoidable. The outside supplier has offered to sell the units at $64 per unit. The increase (decrease) in net income from purchasing the part from the outside supplier would be O $66800 decrease $12200 increase $54800 increase $12200 decrease
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