Dong Fang Company fabricates inexpensive automobiles for sale to 3rd world countries. Each auto includes one wiring harness, which is currently made in-house. Details of the harness fabrication are as follows: 
A factory in Indonesia has offered to supply Dong Fang with ready-made units for a price of $14 each. Assume that Dong Fang's fixed costs are unavoidable, but that Dong could use the vacated production facilities to earn an additional $7,500 of profit per month. What will be the impact on Dong Fang's monthly operating income, if Dong Fang decides to outsource?
A) It will go up by $2,100.
B) It will go down by $14,000.
C) It will go up by $8,600.
D) It will go down by $400.
Correct Answer:
Verified
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