Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:
Direct materials $8,400
Direct labor 11,250
Variable overhead 12,600
Fixed overhead 16,200
An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit.
If Clemente accepts the offer, by how much will net income increase (decrease)?
a) $(8,850)
b) $(2,850)
c) $3,750
d) $19,950
c) $3,
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