Thematics Publishing produces 10,000 binders each year. Each binder has a variable cost of $17...
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Accounting
Thematics Publishing produces 10,000 binders each year. Each binder has a variable cost of $17 and total fixed costs of $110,000 per year. The binders can be purchased from an outside supplier for $20 each. The production space will remain idle, but fixed costs can be reduced by 30%. The annual impact of purchasing the binders will be to:
increase operating income by $3,000.
increase operating income by $47,000.
decrease operating income by $3,000.
decrease operating income by $47,000.
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