Lightning Semiconductors produces 100,000 hi – tech computer chips per month. Each chip uses a component thatLightning makes in - house. The variable costs to make the component are $1.40 per unit, and the fixed costs are$1,300,000 per month. The company has been approached by a foreign producer who can supply the component,within acceptable quality standards, for $1.20 each. The fixed costs are unavoidable, and Lightning would have noother use for the facilities currently employed in making the component. What would be the effect on operating incomeif the company decides to outsource?O A. Lightning Semiconductors could save $1,300,000 per month in costs.B. There would be no effect on operating income.O c. Lightning Semiconductor's costs would increase by $120,000 per month.O D. Lightning Semiconductors could save $20,000 per month in costs.

The right answer is option d. Lightning semiconductors could save $20,000 per month in costs.

Answered: king the cor 0,000 per m me.

Business

Accounting

king the cor 0,000 per m me.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 2PB: Mortech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and...

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