A company manufactures 17,100 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials $162,000 Direct labor 300,000 Variable manufacturing overhead 96,000 Fixed manufacturing overhead Total 180,000 $738,000 The company could avoid $70,000 of fixed manufacturing overhead if it purchases the component from an outside supplier. An outside supplier has offered to sell the component for $34. If the company purchases the component from the supplier instead of manufacturing it, the effect on income would be a: Multiple Choice $466,000 decrease. $46,600 increase purchases the component from an outside supplier. An outside supplier has ffered to sell the component for $34. If the company purchases the component from the supplier instead of manufacturing it, the effect on income would be a: Multiple Choice $466,000 decrease. $46,600 Increase. $652,400 increase. $279,600 increase