Billings Company Has the Following Costs When Producing 100,000 Units $\quad \$ 600,000$

question 56

Multiple Choice

Billings Company has the following costs when producing 100,000 units: Variable costs $\quad \$ 600,000$
Fixed costs $\quad 900,000$ An outside supplier has offered to make the item at $4.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $165,000. The net increase (decrease) in the net income of accepting the supplier's offer is

• A)$285,000.
• B)$315,000.
• C)$(15,000).
• D)$840,000.

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Definitions:

Single-family Dwelling

A residential structure designed to house one family unit independently.

Common Parts

Areas within a property or building that are available for use by all occupants or owners, such as lobbies, gyms, and shared outdoor spaces.

Increase

To make or become greater in size, amount, intensity, or degree.

Rent

The payment made by a tenant to use property owned by someone else for a predefined period.