Thematics Publishing produces 10,000 binders each year. Each binder has a variable cost of $17 and total fixed costs of $110,000 per year. The binders can be purchased from an outside supplier for $20 each. The production space will remain idle, but fixed costs can be reduced by 30%. The annual impact of purchasing the binders will be to:

increase operating income by $3,000.

increase operating income by $47,000.

decrease operating income by $3,000.

decrease operating income by $47,000.