Voltaic Electronics uses a standard part in the manufacture of different types of radios. The...
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Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 35,000 parts is $105,000, which includes fixed costs of $50,000 and variable costs of $55,000. The company can buy the part from an outside supplier for 52 per unit and avoid 20% of the fixed costs. Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $16,000. If Voltaic outsources, what will be the effect on operating income? O A. decrease of $10,000 B. increase of $11,000 OC. increase of $16,000 OD. decrease of $11,000
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