Sutton Inc If Sutton Inc

Multiple Choice

Sutton Inc. can produce 100 units of a component part with the following costs: $$\begin{array} { l r } \text { Direct Materials } & \$ 130,000 \\\text { Direct Labor } & 103,000 \\\text { Variable Overhead } & 82,000 \\\text { Fixed Overhead } & 62,000\end{array}$$ If Sutton Inc. can purchase the units externally for $300000 by what amount will its total costs change?

A) An decrease of 67000
B) An increase of $15000
C) An increase of $135000
D) A decrease of $47000