Bamboose manufactures and sells 15,000 components per year as one part of its production activities....
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Accounting
Bamboose manufactures and sells 15,000 components per year as one part of its production activities. The annual costs to manufacture the part are as follows:
Direct materials $150,000
Direct labor $200,000
Variable manufacturing overhead $110,000
Fixed manufacturing overhead (allocated) $72,000
Fixed manufacturing costs (unique to part) $45,000
Total $577,000
An outside supplier has offered to sell the component to Industry for $34 each. If Industry purchases the component instead of manufacturing it, what would be the effect on Industrys annual net income?
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