ACME Incorporated produces 20,000 parts each year.  The cost per unit at this level of activity is as follows:

 

Variable manufacturing costs	$8.25
Fixed manufacturing overhead	10.00
Total cost per part	$18.25

 

ACME can purchase the part from an outside supplier for $16.00 per part.  The fixed manufacturing overhead includes $6 that will continue even if the part is purchased from an outside supplier.  If the part is purchased, the facilities now being used to produce the part can be rented to another company for $65,000 per year.

     

Required:  

Will total profit increase or decrease, and by how much, if the part is purchased from the outside supplier?