Yankton Industries Manufactures 20,000 Components Per Year

Multiple Choice

Yankton 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 $23.50.
What is the effect on income if Yankton Industries purchases the component from the outside supplier?

A) $20,000 increase
B) $20,000 decrease
C) $80,000 decrease
D) $80,000 increase