Lux company annually produces 300 units of a component with the following unit costs to...
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Accounting
Lux company annually produces 300 units of a component with the following unit costs to produce that component.
Direct materials
$420
Direct Labor
110
Variable manufacturing overhead
90
Fixed manufacturing overhead
60
Total unit cost
$680
A supplier has offered to provide the component to X Company for $640 per unit. Total annual fixed costs of the company would not change if the component is purchased.
If X Company buys the component rather than making it, by what amount would the company's annual net income increase or decrease?
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