The Ross Unlimited, Inc. makes reels for their fly fishing rods. Ross' costs to produce 210,000 these reels on an annual basis are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $42.000 $63,000 $31,500 $69.000 Ozark is a new company just formed that makes nothing but these reels and they claim they are superior to the ones Ross manufactures. Ozark is offering to sell Ross these reels for $0.80 per reel. If Ross buys the reels from Ozark then $24,000 of annual fixed overhead could be avoided. Furthermore, the warehouse now being used to manufacture those reels can be rented out to Blue Cat Company for $57,900 per year. Direct labor is a variable cost. If the reels are purchased from Ozark, then Ross' annual net operating income would: O decrease by $7,500 o increase by $71,100 O increase by $50,400 O increase by $42,000