Sierra Semiconductors produces? 100,000 high-tech computer chips per month. Each chip uses a component that Sierra makes? in-house. The variable costs to make the component are? $1.30 per? unit, and the fixed costs are? $1,100,000 per month. The company has been approached by a foreign producer who can supply the?component, within acceptable quality? standards, for? $1.20 each. If the company chooses to? outsource, fixed costs can be reduced by? 40%. There are no other uses for the facilities currently employed in making the component. What would be the effect on operating? income, if the company decides to? outsource?