Clemente Inc incurs the following costs to produce 10,000 units of a subcomponent Direct materials $8,400 Direct labor 11,250 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell Clemente the subcomponent for $2 85 a unit Reference Ref 7 2 If Clemente accepts the o...

Total Cost of Manufacturing Direct Material Direct labor Variable overhead ...

Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct

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Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:

Direct materials	$8,400
Direct labor	11,250
Variable overhead	12,600
Fixed overhead	16,200

An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.

Reference: Ref 7-2

If Clemente accepts the offer, by how much will net income increase (decrease)?

Select one:

a. $3,750

b. $19,950

c. $(8,850)

d. $(2,850)

Related Book For answer-question

Managerial Accounting Creating Value in a Dynamic Business Environment

ISBN: 978-0078025662

10th edition

Authors: Ronald Hilton, David Platt

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Posted Date: Jul 15, 2021 06:21 AM

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Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct

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Managerial Accounting Creating Value in a Dynamic Business Environment

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