Sunland Company produces 5000 units of part A12E. The following costs were incurred for that level of production:

Direct materials	$ 55000
Direct labor	160000
Variable overhead	75000
Fixed overhead	175000

If Sunland buys the part from an outside supplier, $45000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $71, net income will increase (decrease) by

$85000.

$(65000).

$(20000).

$135000.