Exercise $6-12$A $($Algo$)$ Outsourcing decision with qualitative factors LO $6-3$

Fanning Corporation, which makes and sells $80,800$ radios annually, currently purchases the radio speakers it uses for $$30$ each. Each radio uses one speaker. The company has idle capacity and is considering the possibility of making the speakers that it needs. Fanning estimates that the cost of materials and labor needed to make speakers would be a total of $$28$ for each speaker. In addition, supervisory salaries, rent, and other manufacturing costs would be $$179,000.$ Allocated facility$-$level costs would be $$99,500.$

Required

a$.$ Determine the change in net income Fanning would experience if it decides to make the speakers.

Net income will be

byExercise $6-12$A $($Algo$)$ Outsourcing decision with qualitative factors LO $6-3$

Fanning Corporation, which makes and sells $80,800$ radios annually, currently purchases the radio speakers it uses for $$30$ each. Each radio uses one speaker. The company has idle capacity and is considering the possibility of making the speakers that it needs. Fanning estimates that the cost of materials and labor needed to make speakers would be a total of $$28$ for each speaker. In addition, supervisory salaries, rent, and other manufacturing costs would be $$179,000.$ Allocated facility$-$level costs would be $$99,500.$

Required

a$.$ Determine the change in net income Fanning would experience if it decides to make the speakers.

Net income will be

by