Evaluation methods use some measurable quantity as the basis for assessing performance.

Objective evaluation methods use some measurable quantity as the basis for assessing performance.
Objective evaluation tends to set some sort of countable standard and judge the employees based on whether they're able to pass that standard or not. An example of this countable standards are: Total sales, total customer complaints, total customer ratings, etc.

Option (a) is correct.

Explanation:

Manufacturing cost:

= Direct materials + Direct labor + Variable overhead + Fixed overhead

= $80,000 + $100,000 + $30,000 + $60,000

= $270,000

Purchase from outside:

= Fixed overhead + Purchase price

= $60,000 + (50,000 × $10)

= $60,000 + $500,000

= $560,000

Effect on income = Purchase from outside - Manufacturing cost

                            = $560,000 - $270,000

                            = $290,000

Therefore, the above calculations shows that income will decrease by $290,000.