Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined...
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Concierge Industries manufactures 40,000 components per year. The manufacturing cost of the components was determined as follows: Direct materials $ 75,000 Direct labor 120,000 Variable manufacturing overhead 45,000 Fixed manufacturing overhead 60.000 Total $300,000 An outside supplier has offered to sell the component for $12.75. What is the effect on income if Concierge Industries purchases the component from the outside supplier? a. $30,000 increase O b. $270,000 decrease O c $30,000 decrease O d. $270,000 increase
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