Manor,IncCurrently Manufactures 1,000 Subcomponents Per Month in One of Its

Multiple Choice

Manor,Inc.currently manufactures 1,000 subcomponents per month in one of its factories.The unit costs to produce the subcomponents are: Manor is considering purchasing the subcomponents from an outside supplier,who normally charges $300 per unit.The supplier also has an "Exclusive Buyer's Club" which costs $30,000 per month to join,but whose members can purchase the subcomponents for $250 per unit.Fixed overhead is not avoidable.If Manor chose to purchase the subcomponents using the cheaper of the two buying options,what would be the effect on profit?

A) Decrease $25,000
B) Decrease $5,000
C) Increase $20,000
D) Increase $75,000