Harvey Automobiles uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $130,000, which includes fixed costs of $90,000 and variable costs of $40,000. The company can buy the part from an outside supplier for $3.30 per unit, and avoid 30% 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 $179,000 profit. If Harvey Automobiles makes the part, what will its operating income be?

$179,000 greater than if the company bought the part

$49,000 greater than if the company bought the part

$49,000 less than if the company bought the part

$79,000 greater than if the company bought the part