Question 5 Ecru Company manufactures 10,000 components per year. The manufacturing cost of the components was determined as follows: Direct materials $ 70,000 Direct labor 115,000 Variable manufacturing overhead 40,000 Fixed manufacturing overhead 60,000 Total $285,000 An outside supplier has offered to sell the component for $20. What is the effect on income If Ecru Company purchases the component from the outside supplier? 525.000 decrease 585,000 increase 525,000 Increase O $85.000 decrease