Harvey automobiles uses a standard part in the manufacture of several of its trucks. the cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. the company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs.

if harvey automobiles makes the part, how much will its operating income be?

select one:

a. $42,000 greater than if the company bought the part

b. $42,000 less than if the company bought the part

c. $78,000 greater than if the company bought the part

d. $78,000 less than if the company bought the part