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Waterway Industries incurs the following costs to produce 9600 units of a subcomponent: Direct materials $8064 Direct labor 10848 Variable overhead 12096 Fixed overhead 16200

Waterway Industries incurs the following costs to produce 9600 units of a subcomponent: Direct materials $8064 Direct labor 10848 Variable overhead 12096 Fixed overhead 16200 An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit. If Waterway could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $(2544). $6648. $648. $(5784).

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