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:

Weschler

Refers to a series of standardized tests used to assess cognitive and intellectual abilities in children and adults.

Spearman

Refers to Charles Spearman, a psychologist known for his work in intelligence research and the concept of the general intelligence factor "g".

Anterior Cingulate Cortex

A region of the brain involved in a variety of functions, including emotion regulation, decision-making, and impulse control.

Executive Control

Processes such as making plans or overriding habitual responses that let the brain direct its own cognitive activities.