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)

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Definitions:

Skill Levels

The classification of employees or tasks based on the complexity, required expertise, and responsibilities associated with a job.

Job Tenure

The length of time an individual has worked within a particular organization or held a specific position, often associated with job stability and experience levels.

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A method of comparing business processes and performance metrics to industry bests or best practices from other companies.

Balanced Scorecard

A system for strategic planning and management utilized by organizations to convey their objectives and align and measure performance in accordance with strategic aims.