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

question 82

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 could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by

• A) $750.
• B) $(5,850).
• C) $(3,150).
• D) $6,750.

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Definitions:

Key People

Individuals who play a crucial role in a specific context, such as a project, organization, or event.

Internship

A period of work experience offered by an organization for a limited period of time, often by students or trainees to gain practical knowledge in a particular field.

Gap

A disparity or difference between two points, measurements, or states.

Expectations

Beliefs or anticipate norms about future occurrences or behaviors, often serving as standards for judging performance or outcomes.