The following costs are incurred by Garrett Manufacturing when producing 150,000 units:

Variable costs	$700,000
Fixed costs	900,000

An outside supplier has offered to make the item at $5.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $170,000. The net increase (decrease) in the net income of accepting the supplier's offer is

		$ 45,000
		$775,000
		$125,000
		($75,000)