A Company Produces 400 Microwave Ovens Per Month,each of Which

A company produces 400 microwave ovens per month,each of which includes one electrical circuit.The company currently manufactures the circuits in-house but is considering outsourcing the circuits at a contract cost of $28 each.Currently,the cost of producing circuits in-house includes variable costs of $26 per circuit and fixed costs of $5,000 per month.Assume the fixed costs are unavoidable but that company could employ the vacated premises to earn rental income of $2,400 per month.If the company outsources,monthly operating income will ________.

A) increase by $1,600
B) decrease by $11,200
C) decrease by $800
D) increase by $21,600