Voltaic Electronics uses a standard part in the manufacture of different types of radios. The...
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Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 33,000 parts is $105,000, which includes fixed costs of $50,000 and variable costs of $55,000. The company can buy the part from an outside supplier for $1 per unit and avoid 30% of the fixed costs. Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $15,000. If Voltaic outsources, what will be the effect on operating income? A. decrease of $15,000 O B. increase of $52,000 C. increase of $15,000 OD. decrease of $52,000
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