Acompany produces 500 microwave ovens per month, each of which includes one electrical circuit. the company currently manufactures the circuits in-house but is considering outsourcing the circuits at a contract cost of $28 each. currently, the cost of producing circuits in-house includes variable costs of $26 per circuit and fixed costs of $7,000 per month. assume the company could eliminate all fixed costs by outsourcing and that there is no alternative use for the facilities presently being used to make circuits. if the company outsources, operating income will

Operating income will be $6,000

Explanation:

The computation of the operating income is shown below:

= Total cost - outsourcing cost

where,

Total cost = Variable cost + fixed cost

Variable cost = Number of microwaves × variable cost per unit

                       = 500 × $26

                       = $13,000

And, the fixed cost is $7,000

Now put these values to the above formula  

So, the value would equal to

= $13,000 + $7,000

= $20,000

And, the outsourcing cost equal to

= Number of microwaves × outsourcing cost per unit

= 500 × $28

= $14,000

So, the net income would be

= $20,000 - $14,000

= $6,000

a

explanation:

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20