Multiple Choice
Xon Company needs 1,000 components for one of its products. It can subcontract production of the components to the Eon Company for $40 each. The business can produce the components internally for a total variable cost of $30 per component. Xon Company has spare capacity. What will be the impact on Xon's profit if Eon's offer is accepted?
A) $10,000 decrease.
B) $10,000 increase.
C) $1,000 increase.
D) $1,000 decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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