Value Electronics Uses a Standard Part in the Manufacture of Different

question 39

Multiple Choice

Value Electronics uses a standard part in the manufacture of different types of radios.The total cost of producing 28,000 parts is $90,000,which includes fixed costs of $30,000 and variable costs of $60,000.The company can buy this part from an external supplier for $5 per unit and avoid 10% of the fixed costs.If Value Electronics decides to outsource the production of the part,how will it impact its operating income?

• A)Operating income increases by $77,000.
• B)Operating income decreases by $77,000.
• C)Operating income increases by $80,000.
• D)Operating income decreases by $80,000.

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Definitions:

Support Group

A group of people with common experiences or concerns who provide each other with encouragement, comfort, and advice.

Change Group

A group formed with the intention of facilitating personal or organizational changes among its members.

Psychological Problem

Refers to mental or behavioral patterns that cause significant distress or impairment in personal functioning.

Group Approach

Strategies or methodologies adopted by groups to address problems, achieve goals, or perform tasks.