Quinton Products manufactures digital cameras. Currently, the company manufactures its own carrying case for the cameras at the following unit costs: Direct materials $2.00 Direct labor $2.00 Variable overhead $1.00 Fixed overhead $1.00 Another manufacturer has offered to supply Quinton with the case at a cost of $6 each. Quinton currently makes 9,000 cases annually. If Quinton accepts the offer,
what will be the short-term impact on net income?
A) No impact on net income.
B) Decrease by $9,000.
C) Increase by $9,000.
D) Decrease by $18,000.
B
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