Business, 09.02.2021 04:30 chloejaylevesque
Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials $150,000 Direct labor 240,000 Variable manufacturing overhead 90,000 Fixed manufacturing overhead 120,000 Total $600,000 An outside supplier has offered to sell the component to Ortega for $34. Assume that the the fixed manufacturing overhead is common fixed overhead. Which means that the fixed overhead would remain the same even if the company decides to buy the component from an outside supplier. If Ortega Industries purchases the component from the outside supplier, the effect on income would be a: $30,000 increase. $30,000 decrease. $90,000 increase. $90,000 decrease.
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Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components...
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