An outside supplier has offered to provide Maxter Corp with the 10,000 subcomponents at a $65 per unit price. If Maxter Corp accepts the outside offer, what will be the effect on short-term profits? Group of answer choices $200,000 increase $150,000 decrease No change $50,000 increase

Option b ($150,000 decrease) is the correct answer.

Explanation:

Given:

Fixed manufacturing overhead,

= $65

Units,

= 10,000

According to the question,

Current cost is:

=

= ($)

The expected cost will be:

=

By substituting the values, we get

=

=

=

then,

=

= ($)

Thus the above is the right answer.

answer; //i believe that the correct answer is (b); ///toblas works as a preschool teacher;

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total