Vaughn Manufacturing incurs the following costs to produce 10700 units of a subcomponent: Direct materials $8988 Direct labor 12091 Variable overhead 13482 Fixed overhead 16200 An outside supplier has offered to sell Vaughn the subcomponent for $2.85 a unit. If Vaughn accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be

Buying the subcomponent will increase income by $7,666.

Explanation:

Giving the following information:

Units= 10,700

Production costs:

Direct materials $8,988

Direct labor $12,091

Variable overhead $13,482

An outside supplier has offered to sell Vaughn the subcomponent for $2.85 a unit.

Additional income=  $3,600

To calculate which one is better, we need to determine the total cost of both options. We will not take into account the fixed costs.

Production:

Total cost= 8,988 + 12,091 + 13,482= $34,561

Buy:

Total cost= 10,700*2.85 - 3,600= $26,895

Buying the subcomponent will increase income by $7,666.

answer; ///the above statement is (false) .

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.