Galaxy Industries manufactures 15,000 components per year. Themanufacturing costs of the components were determined to be as follows:Direct materials $150,000Direct labor 240,000Variable manufacturing overhead 90,000Fixed manufacturing overhead 120,000Total $600,000Assume $40,000 of the fixed manufacturing overhead could be avoided if thecomponents are purchased from an outside supplier. An outside supplier hasoffered to sell the component for $34. If Galaxy purchases the component fromthe supplier instead of manufacturing it, the effect on income (profit) would be a

A. $60,000 increase B. $10,000 increase C. $100,000 decrease D. $140,000 increase