chiesser Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows:

Direct materials	$40,000
Direct labor	10,000
Variable overhead costs	30,000
Fixed overhead costs	20,000
Total costs	$100,000

It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Schiesser Engine Company has the option of purchasing the part from an outside supplier at $85 per unit.

If Schiesser Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will:

	A.	increase by $2,000
	B.	increase by $13,000
	C.	decrease by $85,000
	D.	decrease by $3,000