Question $32-$ Question$\_027-48939\mathrm{.}1\mathrm{.}0$

PowerSound produces loudspeakers. One electrical component that PowerSound manufactures on its own and uses in the production process causes total costs of $60,000$ for $20,000$ units which include fixed costs of $30,000.$ A supplier is now offering the electrical component at a price of $2\mathrm{.}50.$ If PowerSound buys from this outside supplier, it can save $75\%$ of the fixed costs. If PowerSound decides to outsource the production of the electrical component, what is the effect on profit?

Increase by $2,500$

B

Decrease by $2,500$

C

Decrease by $500$

D

Increase by $7,500$