Simmons Inc. can produce 100 units of a component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $130,000 103,000 82,000 62,000 If Simmons Inc. can purchase the units externally for $305,000, by what amount will its total costs change? An decrease of 72,000 An increase of $10,000 On increase of $100,000

Principles of Accounting Volume 2
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Author:OpenStax
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Chapter5: Process Costing
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Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...
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Simmons Inc. can produce 100 units of a component part with the following costs:
Direct Materials
Direct Labor
Variable Overhead
Fixed Overhead
$130,000
103,000
82,000
62,000
If Simmons Inc. can purchase the units externally for $305,000, by what amount will its total costs
change?
An decrease of 72,000
An increase of $10,000
An increase of $100,000
A decrease of $52,000
Transcribed Image Text:Simmons Inc. can produce 100 units of a component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $130,000 103,000 82,000 62,000 If Simmons Inc. can purchase the units externally for $305,000, by what amount will its total costs change? An decrease of 72,000 An increase of $10,000 An increase of $100,000 A decrease of $52,000
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