Cotton Corp. currently makes 8,500 subcomponents a year in one of its factories. The unit costs to produce are:

	Per unit
Direct materials		$	20.00
Direct labor			26.00
Variable manufacturing overhead			12.00
Fixed manufacturing overhead			11.00
Total unit cost		$	69.00

An outside supplier has offered to provide Cotton Corp. with the 8,500 subcomponents at an $77.00 per unit price. Fixed overhead is not avoidable. If Cotton Corp. accepts the outside offer, what will be the effect on short-term profits?