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Adams company has the following costs when producing 100,000 units: Variable costs...

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Accounting

Adams company has the following costs when producing 100,000 units:

Variable costs $400,000
Fixed costs 800,000

An outside supplier has offered to make the item at $4.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $165,000.

What is the net increase (decrease) in the net income of accepting the suppliers offer?

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