(Answered) Question - fornelli inc can produce 100 units of a

Accounting

Question - Fornelli, Inc. can produce 100 units of a component part with the following costs: Direct materials $15,000 Direct labor 6,500 Variable overhead 16,000 Fixed overhead 11,000 If Fornelli, Inc. can purchase the units externally for $40,000, by what amount will its total costs change?

a) An increase of $40,000.

b) An increase of $2,500.

c) An increase of $8,500.

d) A decrease of $11,000.

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