Your Corporation manufactures laser printers. It currently manufactures the 32,000 imaging drums that it uses in its printers. The annual costs to manufacture these 32,000 drums are as follows:

Cost/unit Total Cost

Variable Costs $23 $736,000

Fixed Costs $65 $2,080,000

Total Costs $88 $2,816,000

Another company has offered to provide Your Corporation with all of its imaging drum needs for $72 per drum. If Your Corporation accepts this offer, 70% of the fixed manufacturing cost above could be totally eliminated. If the offer is accepted, what would be the annual change in the company's overall net operating?