Carver Company manufactures a component used in the production of one of its main products. The following cost information is available: 90 35 Direct materials $420 Direct labor (variable) 110 Variable manufacturing overhead Fixed manufacturing overhead A supplier has offered to sell the component to Carver for $640 per unit. If Carver buys the component from the supplier, the released facilities can be used to manufacture a product that would generate a contribution margin of $20,000 annually. Assuming that Carver needs 4,000 components annually and that the fixed manufacturing overhead is unavoidable, what would be the impact on operating income if Carver outsources? O A. Operating income would decrease by $20,000. OB. Operating income would decrease by $60,000. OC. Operating income would increase by $20,000. OD. Operating income would increase by $80,000. Belfry Company makes special equipment used in cell towers. Each unit sells for $410. Belfry produces and sells 12,700 units per year. They have provided the following income statement data: $5,207,000 Traditional Format Revenue Cost of goods sold Gross profit Selling & admin. expenses $5,207,000 2,800,000 2,407,000 550,000 Contribution Format Revenue Variable costs: Manufacturing Selling & admin. Contribution margin Fixed costs: Manufacturing Selling & admin. Operating income 900,000 300,000 4,007,000 1,900,000 250,000 $1,857,000 Operating income $1,857,000 O A. Operating income will increase by $8,282. OB. Operating income will decrease by $21,719. O C. Operating income will increase by $29,750. OD. Operating income will decrease by $8,282