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Scorpion4ik [409]
3 years ago
12

Bramble Corp. incurs the following costs to produce 13000 units of a subcomponent: Direct materials $10920 Direct labor 14690 Va

riable overhead 16380 Fixed overhead 16200 An outside supplier has offered to sell Bramble the subcomponent for $2.85 a unit. If Bramble accepts the offer, by how much will net income increase (decrease)
Business
1 answer:
Mumz [18]3 years ago
7 0

Answer:

$4,850

Explanation:

The computation is shown below:

Total cost when the production is 13,000 units

Direct materials $10,920

Direct labor $14,690

Variable overhead $16,380

Total $41,900

And, the other case

Their new cost on supplier offer is

= $2.85 × 13,000 units

= $37,050

In the case when the order is accepted So the net income would increased by

= $41,900 - $37,050

= $4,850

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Blake's basis in his home in 2017 = purchase price + legal and administrative fees = $200,000 + ($700 + $2,000) = $202,700

Since the deck that Blake added to his home is considered an improvement that is permanent and increases the home's value, it will also increase the home's basis = $202,700 + $5,000 = $207,700

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