An outside supplier has offered to sell the component for $17. If Bryon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,000. If Bryon purchases the component from the supplier instead of manufacturing it, the effect on income would be

Question

Elaine Cordova

Business

13 November, 14:18

An outside supplier has offered to sell the component for $17. If Bryon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,000. If Bryon purchases the component from the supplier instead of manufacturing it, the effect on income would be

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Answers (1)

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Jacklyn · Answer 1

There would be a $10,000 increase

Explanation:

Remember, Bryon operates a manufacturing firm that could be rented which is going to be an inflow of income to the company account.

However, doing otherwise implies he will expend $17, without any inflow but an outflow of income. Thus, If Bryon purchases the component from the supplier instead of manufacturing it, the effect on income would be a $10,000 increase.