Chris Co. produces sports equipment and is currently producing 1,000 surfboards annually. A supplier has offered to produce the boards for Chris Co. for $300 per board. Chris Co. incurs unit-level costs of $280 per unit. Chris also spends $25,000 on product design each year and incurs $50,000 of facility-level costs. If Chris Co. outsources the boards, they can lease their manufacturing space for $1,000. Based on your quantitative analysis, should Chris Co. outsource the board? What is the effect on profit? Please show your work.

Multiple choice question.

Yes, Chris Co. should outsource the board because outsourcing will increase profit by $6,000.

No, Chris Co. should not outsource the board because outsourcing will decrease profit by $6,000.

No, Chris Co. should not outsource the board because outsourcing will decrease profit by $56,000.

Yes, Chris Co. should outsource the board because outsourcing will increase profit by $56,000.