Meacham Company makes a subcomponent of its major product. Annual produetion of 20,000 subcomponents results in the following per-unit costs: Direct materials $10.00 $ 9.00 S 7.50 S 5.00 Direct labor Variable overhead Fixed overhead Meacham has received an offer from an outside supplier that is willing to provide 20,000 units ofthe subcomponent each year at a price of $28. The facilities being used to make the subcomponent could be rented to another company for $75,000 per year if Meacham were to purchase the subcomponent from the outside supplier If Meacham decides to purchase the subcomponent, what will be the effect on the company's operating income? A. $45,000 increase S70,000 increase S30,000 decrease S70,000 decrease . C. D