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.

---

Definitions:

DICOM

Digital Imaging and Communications in Medicine; a standard for storing and transmitting medical images.

Medical Imaging

The technique and process of creating visual representations of interior body parts for clinical analysis and medical intervention.

Communications Standard

Established guidelines or specifications that dictate how communication systems operate and interact.

X-ray Safety

Guidelines and practices designed to protect individuals from the harmful effects of exposure to X-ray radiation.