An outside supplier has offered to make the item at $4.50 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $165,000. The net increase (decrease) in the net income of accepting the supplier’s offer is

Billings Company has the following costs when producing 100,000 units:

Variable cost $600,000

Fixed cost. 900,000

A. $285,000.

B. $315,000.

C. $(15,000).

D. $840,000.