Hickory Manufacturing has been staining & finishing its rocking chairs in house, based upon an estimated volume of 30,000 rocking chairs per month. The information related to the Finishing Department is as follows:

	Per Unit	Total
Direct materials	$5.00
Direct labor	$17.50
Variable manufacturing overhead	$6.00
Fixed manufacturing overhead	$2.00	$60,000

If Hickory outsources the finishing of the chairs, it can decrease fixed costs by $30,000 per month. Arrow Finishing has offered to do the finishing at a cost of $29.50 per chair. What will be the total effect on Hickory's profits if this offer is accepted?

Multiple choice question.

$0, no change

$30,000 increase

$30,000 decrease

$45,000 decrease