Lux company annually produces 300 units of a component with the following unit costs to...
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Accounting
Lux company annually produces 300 units of a component with the following unit costs to produce that component.
| Direct materials | $420 | |
| Direct Labor | 110 | |
| Variable manufacturing overhead | 90 | |
| Fixed manufacturing overhead | 60 | |
| Total unit cost | $680 |
A supplier has offered to provide the component to X Company for $640 per unit. Total annual fixed costs of the company would not change if the component is purchased.
If X Company buys the component rather than making it, by what amount would the company's annual net income increase or decrease?
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