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Walsh Automobile Company fabricates automobiles. Each vehicle includes one airflow sensor , which is currently made in - house. Details of the airflow sensor fabrication

Walsh Automobile Company fabricates automobiles. Each vehicle includes one airflow sensor, which is currently made in - house. Details of the airflow sensor fabrication are as follows:
\table[[Volume,800,units per month],[Variable cost per unit,$7.00,per unit],[Fixed costs,$14,000,per month]]
A Japanese factory has offered to supply Walsh with ready-made units for a cost of $14 per sensor. Assume that Walsh's fixed costs could be reduced by $5,000 if it outsources and that Walsh will not be able to use the excess capacity in any profitable manner. If Walsh decides to outsource, monthly operating income will:
A. decrease by $600
B. increase by $5,600
C. increase by $14,000
D. decrease by $14,000
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