Solo Company manufactures 20,000 components per year The manufacturing cost per unit of the components is as follows Direct materials Direct labour Variable overhead Fixed overhead Total unit cost R10 14 8 8 R38 Assume that the fixed overhead reflects the cost of Solo's manufacturing facility This facility cannot be used for any other purpose An outside supplier has offered to sell the component to Solo for R32 Requirement: What is the effect on income if Solo purchases the component from the outside supplier? (7) Assume that Solo can avoid R50,000 of the total fixed overhead costs if it purchases the components Now what is the effect on income if Solo purchases the component from the outside supplier? (8)