Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. we make and sell inexpensive "lab-on-chip" laborat

We make and sell inexpensive "lab-on-chip" laboratory kits for medical testing. We currently make the...

60.1K

Verified Solution

Question

Accounting

image
We make and sell inexpensive "lab-on-chip" laboratory kits for medical testing. We currently make the microchips used in the laboratory kits. Our absorption unit cost for microchips is detailed below: Direct Materials (DM) $ 1.00 Direct Labor (DL) 10.00 Variable Manufacturing Overhead (VOH) 5.00 Fixed Manufacturing Overhead (FOH) 8.00 $24.00 Total An external supplier offers to sell us 10,000 of the microchips for $22.00 per chip. If we accept this proposal, $50,000 of our fixed overhead will be avoided. Which of the following statement is correct? OA. If we buy chips, we avoid the relevant costs of $220,000. B. The net effect of buying the chip will be a decrease in net income of $10,000. Oc. The net effect of buying the chip will be an increase in income of $10,000. D. None of the above

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Algebra
1.2K views

Fesolv SSAKING Which of the following correctly deonstrates the message of this cartoon A While...

Civil Engineering
1.2K views

USING USA IBC CH.9 1.            Name the standard which governs all aspects of concrete; materials used to...

Biology
1.2K views

Natural killer cells have Fas ligand on their surface, which can activate so-called "death receptors"...

Physics
1.2K views

25 A ball is dropped from a height of 20 m above the surface of...

Physics
1.2K views

A needle of a sewing machine moves along a path of amplitude 4 cm with...

Accounting
1.2K views

A firm operated at 80% of capacity for the past year, during which fixed costs...

Accounting
1.2K views

All three parts please Astro Company sold...

Accounting
1.2K views

Regan runs her own hot dog stand on the U of A campus. The monthly...

Accounting
1.2K views

Required information [The following information applies to the questions displayed below.] Simon Company's year-end balance...

Accounting
1.2K views

Required: Use the following information to complete Keith and Jennifer Hamilton's 2020 federal income tax...

Finance
1.2K views

An investor is considering purchasing a bond with a 8.92 percent coupon interest rate, a...

Finance
1.2K views

John Brown is a self-employed architect. He purchased a house in the outer suburbs of...