Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:
Direct materials $8,400
Direct labor 11,250
Variable overhead 12,600
Fixed overhead 16,200
An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
If Clemente accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3,600. The increase (decrease) in net income from accepting the offer would be
a) $150.
b) $(3,600).
c) $7,350.
d) $(150).
c) $7,350
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A) $112,148.50 B) $120,000.00 C) $133,241.15 D) $123,371.44
The total fixed overhead variance is the total of the variable overhead cost variance and fixed overhead volume variance
Indicate whether the statement is true or false