Use the Following Information for Questions
Clemente Inc An Outside Supplier Has Offered to Sell Clemente the Subcomponent

question 159

Multiple Choice

Use the following information for questions
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: $$\begin{array} { l l } \text { Direct materials } & \$ 8,400 \\\text { Direct labor } & 11,250 \\\text { Variable overhead } & 12,600 \\\text { Fixed overhead } & 16,200\end{array}$$ An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
-If Clemente accepts the offer, by how much will net income increase (decrease) ?

• A) $3,750
• B) $19,950
• C) $(8,850)
• D) $(2,850)

---

Definitions:

Civil Rights Act of 1964

The Civil Rights Act of 1964 is a landmark piece of federal legislation in the United States that prohibited discrimination on the basis of race, color, religion, sex, or national origin, particularly in voting, employment, and public accommodations.

Voting Rights Act of 1965

A landmark piece of federal legislation in the United States that aimed to eliminate racial discrimination in voting.

Federal Legislation

Laws passed by the national government of a federal country such as the United States.

Right to Bear Arms

The constitutional right, primarily found in the Second Amendment of the U.S. Constitution, that allows individuals to possess and carry weapons.