The Rodgers Company makes $27,000$ units of a certain component each year for use in one of its products. The cost per unit for the component at this level of activity is as

follows:

Rodgers has received an offer from an outside supplier that is willing to provide $27,000$ units of this component each year at a price of $$50$ per component. Assume that direct

material and direct labour are variable costs.

Assume that if the components were to be purchased from the outside supplier, $$70,200$ of annual fixed manufacturing overhead would be avoided, and the facilities now

being used to make the component would be rented to another company for $$129,600$ per year. If Rodgers chooses to buy the component from the outside supplier under

these circumstances, what would be the impact on annual operating income due to accepting the offer?

Select one:

a$.$ $$37,800$ increase.

b$.$ $$91,800$ decrease.

c$.$ $$34,400$ increase.

d$.$ $$21,400$ decrease.