Moving to anter queston wil save this response Question 5 of 6 Question 5 2 poin

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Moving to anter queston wil save this response Question 5 of 6 Question 5 2 points Save Answer Derby Inc. manufactures a product which contains a small part The now has enough excess capacity (including traned workers) to begn company has always purchased this motor from a supplier tor $125 each Derby recently upgraded its own manutactuning capabilbies and manufacturing the molor insload of buying t The company prepared the following per unit cost projections ofl making the motor, assuming Direct materis verhead (foxed and variable The required volume of outud to produce the motors wil not require any incremental Sxed owerhoad Incremental variable overhead cost is $21 per molor. What is the offect on income if Derby decides to make the motors? G Income will decrease by $16 per unt O Income wll increase by $16 per unt O Income wllincrease by $23 per unt O Income will decrease by $23 per un O Income will increase by $39 per unt Moving to another queston wil save his response 1/28/2017 22323233323232332223882222932993333339$33355sssssssssssss

Explanation / Answer

Income will increase by 16 per unit

Make Amt Buy Amt Direct Material            38.00 Cost of Purchase      125.00 Direct Labor            50.00 Variable Overhead            21.00 Relevant Fixed Cost                   -   Total Cost          109.00      125.00 Savings (125-109) 16

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