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Fastec Automobile Company fabricates automobiles. Each vehicle includes one transfer case, which is currently made...

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Accounting

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Fastec Automobile Company fabricates automobiles. Each vehicle includes one transfer case, which is currently made in-house. Details of the transfer case fabrication are as follows: per unit Volume 900 units per month Variable cost per unit $6.00 Fixed costs $14,000.00 per month A Korean factory has offered to supply Fastec with ready-made units for a price of $12.00 per transfer case. Assume that Fastec's fixed costs are unavoidable, but that Fastec could use the vacated production facilities to earn an additional $9,500.00 of profit per month. If Fastec decides to outsource, monthly operating income will: O A. increase by $4,100.00 B. increase by $9,500.00 C. decrease by $14,000.00 D. decrease by $25,700.00

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