Part O43 is used in one of Scheetz Corporation's products. The company's Accounting Department reports the following costs of producing the 16,800 units of the part that are needed every year.

Per UnitDirect materials$4.00Direct labor$4.70Variable overhead$7.70Supervisor's salary$8.40Depreciation of special equipment$9.00Allocated general overhead$6.00

An outside supplier has offered to make the part and sell it to the company for $33.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $22,800 of these allocated general overhead costs would be avoided.

Required:

a.Prepare a report that shows the effect on the company's total net operating income of buying part O43 from the supplier rather than continuing to make it inside the company.(Input the amount as a positive value. Omit the "$" sign in your response.)

net operating income would be increased or decreased by how much and which alternative should the company choose, make or buy