Multiple Choice Question

Wilson Co$.$ currently produces $2,000$ tennis rackets annually. A supplier has offered to produce the rackets for $$370$ per racket. Wilson incurs unit$-$level costs of $$360$ per racket and spends $$10,000$ on product design each year. Annual facility$-$level costs are $$100,000.$ What is the effect on profit if Wilson Co$.$ outsources the rackets?

$$110,000$ decrease

$$10,000$ decrease

$$10,000$ increase

$$110,000$ increase

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