What the increase or decrease in net income

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Question - Concord Corporation incurs the following costs to produce 10400 units of a subcomponent:

Direct materials $8736

Direct labor 11752

Variable overhead 13104

Fixed overhead 16200

An outside supplier has offered to sell Concord the subcomponent for $2.85 a unit.

If Concord accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. What the increase or decrease in net income from accepting the offer?

Reference no: EM132990058

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