Damon Industries manufactures 26,000 components per year. The manufacturing cost of the components was determined as follows:

Direct materials	$	130,000
Direct labor		166,000
Variable manufacturing overhead		66,000
Fixed manufacturing overhead		86,000

An outside supplier has offered to sell the component for $15. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,600. If Damon purchases the component from the supplier instead of manufacturing it, the effect on income would be:

a $83,400 increase.

a $47,400 decrease.

a $38,600 increase.

a $17,400 decrease.