Ramon Corp makes 18,000 units of part E44 each year.

10. Ramon Corp makes 18,000 units of part E44 each year. This part is used in one of the company's products. the part at this level of activity: 60 The company's Accounting Department reports the following costs of producing Per Unit- $2.20 $5.40 $8.00 $7.30 $6.60 $1.80 Direct Materials Direct Labor Variable MOH Supervisor's Salary Depreciation of special equipment Allocated general overhead An outside supplier has offered to produce this part and sell it to the company for $23.30 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 $5,000 of these allocated general overhead costs would be avoided. In addition, the space used to produce part E44 would be used to make more of one of the company's other products, generating an additional segment margin of $21,000 per year for that product. If management decides to buy part S00 from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income? A. B. C. D. NOI would increase by $21,000 per year NOI would increase by $18,800 per year NOI would decrease by $123,000 per year NOI would decrease by $165,000 per year Page