Question
Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 39,000 parts is $100,000, which includes
Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 39,000 parts is $100,000, which includes red costs of $40,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $2 per unit and avoid 20% of the fixed costs Assume that the company can use the freed manufacturing space to make another product that can eam a profit of $15,000. If voltaic outsources, what will be the effect on operating income? OA increase of $15,000 OB. decrease of $8,000 OC. increase of $5,000 OD. decrease of $5,000
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