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What will be the short-run impact on income

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Question - Ice Cold Corporation makes dorm-size refrigerators. The company's records show the following unit costs to manufacture part #15498:

Direct materials - $15

Direct labor - $18

Variable overhead - $23

Fixed overhead - $13

Another manufacturer has offered to supply Ice Cold Corporation with part #15498 for a cost of $60 per unit. Ice Cold uses 1,000 units annually.

Required - If Ice Cold Corporation accepts the offer, what will be the short-run impact on income?

Reference no: EM131832177

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