Ultimate Travel Company fabricates automobiles. Each auto includes one wiring harness, which is currently made

inminushouse.

Details of the harness fabrication are asfollows:

Volume	800800	units per month
Variable cost per unit	$ 7$7	per unit
Fixed costs	$ 15 comma 000$15,000	per month

A factory in India has offered to supply Ultimate Travel with

readyminusmade

units for a cost of

$ 7$7

each. Assume that Ultimate Travel's fixed costs are unavoidable, but the company could use the vacated production facilities to earn an additional

$ 5 comma 500$5,500

of profit per month. In order to maximize operating income, Ultimate Travel should outsource.

True

False