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Damon Industries manufactures 1 8 , 0 0 0 components per year. The manufacturing costs of the components were determined as follows: Direct materials $

Damon Industries manufactures 18,000 components per year. The manufacturing costs of the components were determined as follows:
Direct materials $ 144,000
Direct labor 23,500
Variable manufacturing overhead 63,000
Fixed manufacturing overhead 83,000
An outside supplier has offered to sell the component for $14. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $11,900. If Damon purchases the component from the supplier instead of manufacturing it, the effect on operating profits would be a:

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