Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 38,000 parts is $105,000, which includes

image text in transcribed
Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 38,000 parts is $105,000, which includes fixed costs of $50,000 and variable costs of $55,000. The company can buy the part from an outside supplier for $2 per unit and avoid 30% of the fixed costs. Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $15,000 if Voltaic outsources, what will be the effect on operating income? OA increase of $9,000 B. decrease of 59.000 OG increase of $15.000 OD. decrease of $15,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions