Colden Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $13.00 per unit. Colden Enterprises' current cost is $17.75 per unit of the component, based on the 125,000 components that Colden Enterprises currently produces. Read the requirements. This current cost per unit is based on the following calculations: (Click the icon to view the information.) None of Colden Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $35,000 of contribution margin per year. Requirement 1. If Colden Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much exceeds the cost to buy.) Incremental Analysis Outsourcing Decision Make Component Outsource Component Difference Variable costs Plus: Fixed costs Total cost of 125,000 components Less: Profit from another product Net cost If Colden Enterprises outsources the manufacturing of the component, operating income will by Data table Direct material per unit.. 6.25 Direct labor per unit. . 6.75 Variable manufacturing overhead per unit.. 3.00 1.75 Fixed manufacturing overhead per unit.. Total manufacturing costs per unit.. $ 17.75 Print Done ference column when the cost to make