Question - The following costs are incurred by Garrett Manufacturing when producing 150,000 units:
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Variable costs
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$700,000
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Fixed costs
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900,000
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An outside supplier has offered to make the item at $5.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $170,000. Calculate the net increase (decrease) in the net income of accepting the supplier's offer?