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Bamboose manufactures and sells 15,000 components per year as one part of its production activities....

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Accounting

Bamboose manufactures and sells 15,000 components per year as one part of its production activities. The annual costs to manufacture the part are as follows:

Direct materials $150,000

Direct labor $200,000

Variable manufacturing overhead $110,000

Fixed manufacturing overhead (allocated) $72,000

Fixed manufacturing costs (unique to part) $45,000

Total $577,000

An outside supplier has offered to sell the component to Industry for $34 each. If Industry purchases the component instead of manufacturing it, what would be the effect on Industrys annual net income?

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