Chetek Industries Manufactures 15,000 Components Per Year

Multiple Choice

Chetek Industries manufactures 15,000 components per year.The manufacturing cost of the components was determined to be as follows: Assume that the fixed manufacturing overhead reflects the cost of Chetek's manufacturing facility.This facility cannot be used for any other purpose.An outside supplier has offered to sell the component to Chetek for $34.If Chetek Industries purchases the component from the outside supplier,the effect on income would be a

A) $30,000 decrease
B) $30,000 increase
C) $90,000 decrease
D) $90,000 increase