10. In the past, the B Company has used an internal print shop to produce their sales pamphlets. This year they need 500,000 pamphlets. The print shop indicates that the cost to produce the pamphlets includes $640,000 in total variable costs and $100,000 in total fixed costs. An outside firm has offered to produce the 500,000 pamphlets for $700,000. If the print work is outsourced 25% of the fixed costs can be eliminated. In addition, the space used for the print operation can be used for another purpose that will generate $15,000.00 in income a year for the company.

Required: Assuming the company outsources the printing work, what is the financial impact (i.e., change in operating income) in dollars of accepting the outsourcing offer? In addition, in your answer make sure to indicate whether the financial impact would be an increase or decrease in the companys operating income.

	Financial Impact (change in operating income)	Increase	Decrease
10.