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Business, 02.11.2020 16:30 RioQNA

Wintertime Company produces the handles which are used in the production of their snow shovels. Wintertime’s costs to produce 60,000 handles annually are as follows: Direct materials $30,000 Direct labor 55,000 Variable overhead 25,000 Fixed overhead 40,000 TOTAL $150,000 An outside supplier has offered to sell Wintertime similar handles for $2.25 per handle. If the handles are purchased from the outside supplier, $25,000 of annual fixed factory overhead will continue to be incurred and will be allocated to other products. The facilities now being used to make the handles could be rented to another company for $25,000 per year if the handles are purchased from the outside supplier. 8. If Wintertime chooses to buy the handles from the outside supplier, then the change in annual net income due to accepting the offer is a: a. Net income will not change b. $25,000 increase. c. $15,000 increase. d. $10,000 decrease.

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Wintertime Company produces the handles which are used in the production of their snow shovels. Wint...
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