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Your Company produces batteries which are used in the production of their riding tractors. The...

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Accounting

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Your Company produces batteries which are used in the production of their riding tractors. The costs to produce 25,000 batteries annually are as follows: Direct material $ 125,000 Direct labor 720,000 Variable overhead 75,000 Fixed overhead 175,000 Total $1,095,000 An outside supplier has offered to sell Cloverleaf similar batteries for $40 per batteries. If they are purchased from the outside supplier, 40% of annual fixed factory overhead could be avoided. If Your Company decides to buy the battery, what is the change in net income net operating income? OA. $25,000 OB. $10,000 Oc. ($10,000) OD. ($25,000)

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