management accounting

AMAC Lid. manufactures 40,000 units of an item per year. The manufacturing cost per mit of the items are as follows: Direct materials $20 Direct labour $28 Variable overhead $12 $16 Assume that the fixed overhead reflects the cost of JAMAC's manufacturing facility This facility cannot be used for any other purpose, An outside supplier (J.F. Co) has offered to sell the item to JAMAC Ltd. for $64. Required: What is the effect on income if JAMAC Lid. purchases the item from the outside supplier? Assume that JAMAC Lid. can avoid $250,000 of the total fixed overhead costs if it purchases the items from J.F. Co. What would now be the effect on income