Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing 60,000 parts is $150,000, which includes fixed costs of $40,000 and variable costs of $110,000. The company can buy the part from an outside supplier for $3.40 per unit and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If the company makes the part, what will its operating income be? A. $70,000 less than if the company bought the part B. $220,000 greater than if the company bought the part C. $70,000 greater than if the company bought the part OD. $40,000 greater than if the company bought the part Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $520,000 375,000 145,000 76,000 $69,000 Hiking $380,000 255,000 125,000 38,000 $87,000 Fashion $140,000 120,000 20,000 38,000 $(18,000) If $27,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Increase $144,000 B. Increase $7,000 C. Decrease $44,000 D. Increase $75,000