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Vaughn Manufacturing incurs the following costs to produce 10800 units of a subcomponent: Direct materials $9072 Direct labor 12204 Variable overhead 13608 Fixed overhead 16200
Vaughn Manufacturing incurs the following costs to produce 10800 units of a subcomponent:
Direct materials | $9072 |
Direct labor | 12204 |
Variable overhead | 13608 |
Fixed overhead | 16200 |
An outside supplier has offered to sell Vaughn the subcomponent for $2.85 a unit. If Vaughn could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by
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