3

Greenpark Skateboards uses a standard part in the manufacture of several of its skateboards. The cost of producing 40,000 parts is $139,000, which includes fixed costs of $71,000 and variable costs of $68,000. The company can buy the part from an outside supplier for $3.50 per unit, and avoid 30% of the fixed costs. If the company makes the part, how much will its operating income be? A. $92,300 less than if the company bought the part B. $92,300 greater than if the company bought the part C. $50,700 less than if the company bought the part D. $50,700 greater than if the company bought the part