Bryon Industries Manufactures 20,000 Components Per Year

Multiple Choice

Bryon Industries manufactures 20,000 components per year.The manufacturing cost of the components was determined as follows: An outside supplier has offered to sell the component for $17.If Bryon purchases the component from the outside supplier,the manufacturing facilities would be unused and could be rented out for $10,000.If Bryon purchases the component from the supplier instead of manufacturing it,the effect on income would be:

A) a $70,000 increase
B) a $50,000 decrease
C) a $10,000 decrease
D) a $30,000 increase