Net operating income for Green Company
Not what you're looking for?
30. Green Company produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these parts is:
Variable manufacturing cost $12
Fixed manufacturing cost 9
Unit product cost $21
The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. The annual impact on the company's net operating income as a result of buying the part from the outside supplier would be:
A) $1,000 increase. C) $5,000 increase
B) $1,000 decrease. D) $2,000 decrease
Purchase this Solution
Solution Summary
The solution discusses net operating income.
Solution Preview
Current
Variable costs = 1,000*12 = 12,000
Fixed costs = 1,000*9 = ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.