12. Sheridan Company produces 5000 units of part A12E. The following costs were incurred for that level of production:

Direct materials	$ 65000
Direct labor	170000
Variable overhead	85000
Fixed overhead	175000

If Sheridan buys the part from an outside supplier, $30000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $74, net income will increase (decrease) by

a) $165000.

b) $85000.

c) $(50000).

d) $(20000).