Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing40,000 parts is$120,000, which includes fixed costs of$60,000 and variable costs of$60,000. The company can buy the part from an outside supplier for$3.00 perunit, and avoid30% of the fixed costs.

Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for$12,000 profit. If Harvey Automobiles makes thepart, what will its operating incomebe?

A.

$54,000 greater than if the company bought the part

B.

$150,000 greater than if the company bought the part

C.

$30,000 less than if the company bought the part

D.

$30,000 greater than if the company bought the part