Answer:
Decrease by $30,000
Explanation:
Cost to buy = 15,000 * $34
Cost to buy = $510,000
Note: Since Ortega is buying 15000 units at $34, the $40,000 avoidable cost on fixed manufacturing overhead is non-applicable.
Cost of making = $150,000 + $240,000 + $90,000
Cost of making = $480,000
So, if Ortega purchases the component from the supplier instead of manufacturing it, the effect on income would be decrease by $30,000 ($510,000-$480,000).
Farmer Mac works with lenders to make long-term credit available to homeowners and businesses in agricultural and rural communities, including farmers and ranchers.
<h3>What is long term credit?</h3>
- Money borrowed with a minimum five-year grace period before repayment is due: Long-term credit interest rates are likely to remain unchanged or slightly decline.
- Long-term loans include those for cars, homes, and some types of personal loans. Long-term loans are available to suit both personal and business needs, such as purchasing machinery.
- The most common type of credit in the financial sector is long-term borrowing.
- Long-term financing decreases reliance on any one source of funding and offers more resources and flexibility to fund different capital needs.
- It also enables businesses to spread out the maturities of their debt.
Learn more about long term credit here:
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