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10. Coronado Industries incurs the following costs to produce 9100 units of a subcomponent:

Direct materials	$7644
Direct labor	10283
Variable overhead	11466
Fixed overhead	16200

An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. If Coronado could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by

$458.

$6458.

$(5639).

$(1724).

11. Bramble Corp. incurs the following costs to produce 11900 units of a subcomponent:

Direct materials	$9996
Direct labor	13447
Variable overhead	14994
Fixed overhead	16200

An outside supplier has offered to sell Bramble the subcomponent for $2.85 a unit. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be

$922.

$(3600).

$8122.

$(922).

13. Sheridan Company, Inc.currently manufactures a wicket as its main product. The costs per unit are as follows:

Direct materials and direct labor	$13
Variable overhead	5
Fixed overhead	8
Total	$26

The fixed overhead is an allocated common cost. How much is the relevant cost of the wicket?

$18

$21

$39

$26

Please answer all 3 questions. Thank you!

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