CM Company Manufactures a Component Used in the Production of One

CM Company manufactures a component used in the production of one of its main products.The following cost information is available: $$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 420 \\\hline \text { Direct labor (variable) } & 110 \\\hline \text { Variable manufacturing overhead } & 80 \\\hline \text { Fixed manufacturing overhead } & 30 \\\hline\end{array}$$ A supplier has offered to sell the component to CM for $650 per unit.If CM buys the component from the supplier,the released facilities can be used to manufacture a product that would generate a contribution margin of $10,000 annually.Assuming that CM needs 4,000 components annually and that the fixed manufacturing overhead is unavoidable,what would be the impact on operating income if CM outsources?

A) Operating income would decrease by $150,000.
B) Operating income would increase by $10,000.
C) Operating income would decrease by $10,000.
D) Operating income would increase by $160,000.