Cooper Co makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson's production costs are as follows: Direct materials $ 8 Direct labor 32 Variable overhead 12 Fixed overhead (based on normal capacity) 34 If Cooper accepts the order, $8 of fixed overhead per unit will be eliminated. If
the offer is accepted, operating income will
A) increase by $100,000.
B) decrease by $70,000.
C) decrease by $30,000.
D) increase by $60,000.
C
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