Crane Company incurs the following costs to produce 9800 units of a subcomponent:

Direct materials	$8232
Direct labor	11074
Variable overhead	12348
Fixed overhead	16200

An outside supplier has offered to sell Crane the subcomponent for $2.85 a unit. If Crane could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by

$6724.

$(2872).

$724.

$(5842).