Xon Company Needs 1,000 Components for One of Its Products

question 53

Multiple Choice

Xon Company needs 1,000 components for one of its products. It can subcontract production of the components to the Eon Company for $40 each. The business can produce the components internally for a total variable cost of $30 per component. Xon Company has spare capacity. What will be the impact on Xon's profit if Eon's offer is accepted?

• A)$10,000 decrease.
• B)$10,000 increase.
• C)$1,000 increase.
• D)$1,000 decrease.

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