Value Electronics Uses a Standard Part in the Manufacture of Different

question 167

Multiple Choice

Value Electronics uses a standard part in the manufacture of different types of radios.The total cost of producing 25,000 parts is $95,000,which includes fixed costs of $40,000 and variable costs of $55,000.The company can buy this part from an external supplier for $3 per unit and avoid 20% 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 $12,000.
• B)Operating income decreases by $12,000.
• C)Operating income increases by $20,000.
• D)Operating income decreases by $20,000.

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Definitions:

Bullying

A repeated aggressive behavior with the intention to hurt or intimidate someone perceived as vulnerable.

Peer Victimization

The experience of being targeted and harmed by peers, encompassing bullying, harassment, and other forms of social aggression.

Divorce

The official annulment of marriage through a decision made by a court or an authorized agency.

Irreparable Harm

Damage or injury that is permanent, irreversible, or incapable of being rectified or compensated for by any means.