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could somebody please explain how this works ? 32. PowerSound produces loudspeakers. One electrical component that PowerSound manufactures on its own and uses in the

could somebody please explain how this works ?

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32. PowerSound produces loudspeakers. One electrical component that PowerSound manufactures on its own and uses in the production process causes total costs of E60 000 for 20 000 units which include fixed losts of E30 000. A supplier is now offering the electrical component at a price of f2 50. If PowerSound buys from this outside supplier, it can save 75% of the fixed costs. If PowerSound decides to outsource the production of the electrical component, what is the effect on profit? Decrease by $2,500 Increase by $2,500 Decrease by $500 Increase by $7,500

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