Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent: Direct materials $8400 Direct labor 12000 Variable overhead 12000 Fixed overhead 19000 An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(3600). O $10200. O $(3000).
Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent: Direct materials $8400 Direct labor 12000 Variable overhead 12000 Fixed overhead 19000 An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(3600). O $10200. O $(3000).
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 15E
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![Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent:
Direct materials
$8400
Direct labor
12000
Variable overhead
12000
Fixed overhead
19000
An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable.
If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of
$3600. The increase (decrease) in net income from accepting the offer would be
O $(3600).
$10200.
O $(3000).
O $3000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1c13b00f-ebe0-49d5-a66b-7adb1f2b76c5%2Fa8e393d5-aaf2-451d-a0ab-f5299318e19c%2Floeq3hn_processed.png&w=3840&q=75)
Transcribed Image Text:Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent:
Direct materials
$8400
Direct labor
12000
Variable overhead
12000
Fixed overhead
19000
An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable.
If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of
$3600. The increase (decrease) in net income from accepting the offer would be
O $(3600).
$10200.
O $(3000).
O $3000.
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