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Blossom Industries must decide whether to make-or-buy some of its components. The costs of producing...

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Accounting

Blossom Industries must decide whether to make-or-buy some of its components. The costs of producing 178500 battery packs for its product are as follows:
Direct Materials
$15300
Direct Labor
$5100
Variable overhead
$6120
Fixed overhead
$9180
The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $2040 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs?

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