Cheong Automobiles Company Fabricates Inexpensive Automobiles for Sale to Third

Cheong Automobiles Company fabricates inexpensive automobiles for sale to third world countries.Each vehicle 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 Cheong with ready-made units for a price of $14 per wiring harness.Assume that Cheong's fixed costs could be reduced by $5,000 if they outsource,and that Cheong will not be able to use the excess capacity in any profitable manner.What will be the impact Cheong's monthly operating income,if Cheong decides to outsource?

A) It will go up by $2,600.
B) It will go down by $14,000.
C) It will go up by $8,600.
D) It will go down by $400.