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Your Company makes 25,000 motors to be used in the production of its sewing machines. The cost per motor at this level of activity is:

Your Company makes 25,000 motors to be used in the production of its sewing machines. The cost per motor at this level of activity is:

Direct materials $4.50

Direct labor $4.60

Variable manufacturing overhead $3.75

Fixed manufacturing overhead $3.40

An outside supplier has offered to supply all the motors the company needs for $15 each. If your Company decides to buy the motors, there would be no other use for the production facilities and 35% of the fixed manufacturing overhead cost could not be avoided. If your Company decides to buy the motor, what is the change in net income net operating income?

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