Voyage Boat Company manufactures 100 luxury yachts per month. A compact media center is included in each yacht. Voyage Boat manufactures the media center in-house but is considering the possibility of outsourcing this function. At present, the variable cost per unit is $280, and the fixed costs are $42,000 per month. Aaron Dalton, the CEO, wishes to increase operating income by $3000. He has an offer from a foreign producer to provide the media centers at a contract cost of $350 per unit. The required savings in fixed costs in order to achieve his objective would be ________.

A) $3000
B) $7000
C) $10,000
D) $28,000


C) $10,000

Business

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Indicate whether the statement is true or false.

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What will be an ideal response?

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