Question: Save Answer 1 points Your Corporation is presently making a part that is used in one of its products. A total of 8,000 units of

 Save Answer 1 points Your Corporation is presently making a part

Save Answer 1 points Your Corporation is presently making a part that is used in one of its products. A total of 8,000 units of this part are produced and used every year. The company's Accounting has the following costs of producing the part at this level of activity: Direct materials 53.70 Direct labor $1.00 Variable overhead $6.90 Supervisor's salary 58.80 Depreciation of special equipment $3.30 Allocated general overhead $1.60 An outside supplier has offered to produce and sell the part to the company for $24.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. If management decides to buy the part from the outside supplier rather than to continue making the part, what would be the annual change in net operating income? it the change is a decrease, enter your number with a - in front. Otherwise, just enter the number ENTER YOUR ANSWER WITHOUT DOLLAR SIGNS OR OTHER DISCRIPTIONS

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