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Payne and McGough Corporation produces 5,000 units of W1X each for use in the assembly of its finished products. The unit cost of part W1X

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Payne and McGough Corporation produces 5,000 units of W1X each for use in the assembly of its finished products. The unit cost of part W1X is based on a production level of 5,000 units per week as follows: Part W 1X also can be purchased from an outside supplier at $24 per unit. If part W1X is purchased from the supplier, 40% of the fixed costs can be eliminated. If the company purchases part W1 1 from the outside supplier, its operating income will: decrease by $30,000 None of the other choices remain the same. increase by $20,000

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