Business, 11.02.2021 21:10 60129

Damon Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: Direct materials $100,000
Direct labor 160,000
Variable manufacturing overhead 60,000
Fixed manufacturing overhead 80,000

An outside supplier has offered to sell the component for $17. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,000. If Damon purchases the component from the supplier instead of manufacturing it, the effect on income would be:

a. a $30,000 increase.
b. a $50,000 decrease.
c. a $70,000 increase.
d. a $10,000 decrease.

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Damon Industries manufactures 20,000 components per year. The manufacturing cost of the components w...

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