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Calculate the net increase in the net income

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Reference no: EM132109131

Question - The following costs are incurred by Garrett Manufacturing when producing 150,000 units:

Variable costs

$700,000

Fixed costs

900,000

An outside supplier has offered to make the item at $5.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $170,000. Calculate the net increase (decrease) in the net income of accepting the supplier's offer?

Reference no: EM132109131

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