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Vaughn Manufacturing incurs the following costs to produce 11000 units of a subcomponent: Direct materials $8000 Direct labor Variable overhead 12000 Fixed overhead 13000 $(10350)
Vaughn Manufacturing incurs the following costs to produce 11000 units of a subcomponent: Direct materials $8000 Direct labor Variable overhead 12000 Fixed overhead 13000 $(10350) $1650 $(5000) $21650 20000 An outside supplier has offered to sell Vaughn the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable. If Vaughn accepts the offer, by how much will net income increase (decrease)?
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