Greenery Co. manufactures part B855 which is used the production of its portable chargers. Monthly products costs for 1,000 units are as follows:

Direct materials	$43,000
Direct labour	$16,000
Variable overhead	$33,000
Fixed overhead	$26,000
Total cost	$118,000

Greenery Co. has the option of purchasing the B855 from an outside supplier at a cost of $96 per unit. If Greenery Co. purchases the B855 from an outside supplier, it estimates that 12% of the fixed overhead costs that are currently assigned to the B855 will no longer be incurred.

If Greenery Co. purchases 1,000 units of the B855 from the outside supplier per month, then its monthly operating income will:

Question 16 options:

	None of these options is correct.
	Decrease by $880
	Decrease by $1,640
	Increase by $880
	Increase by $1,640