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Anderson Co. currently makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson's per unit production costs are as follows:

Direct materials	$ 8
Direct labor	32
Variable overhead	12
Fixed overhead (based on normal capacity)	34

If Anderson chooses to use the outside vendor, $8 of fixed overhead per unit will be eliminated.

If the offer is accepted, operating income will

a.	increase by $100,000.
b.	decrease by $70,000.
c.	decrease by $30,000.
d.	increase by $60,000.