Vinny Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Per Unit $15 10 Direct materials Direct labor Variable manufacturing overhead 15 Fixed manufacturing overhead 10 Total unit cost $50 An outsißle supplier has offered to sell Vinny Corp. the 20,000 subcomponents for $45 each. The fixed manufacturing overhead relates to all products and subcomponents produced by Vinny. If Vinny Corp. decides to buy the subcomponents instead of making them, what will be the effect on operating income? + $100,000 decrease O $200,000 increase O $200,000 decrease i O $400,000 increase
