Tosh Company Fabricates Automobiles A Factory in Indonesia Has Offered to Supply Tosh with Currently

Tosh Company fabricates automobiles.Each auto includes one wiring harness,which is currently made in-house.Details of the harness fabrication are as follows:
$$\begin{array} { | l | r | l | } \hline \text { Volume } & 900 & \text { units per month } \\\hline \text { Variable cost per unit } & \$ 10 & \text { per unit } \\\hline \text { Fixed costs } & \$ 14,000 & \text { per month } \\\hline\end{array}$$ A factory in Indonesia has offered to supply Tosh with ready-made units for a cost of $8 each.Assume that Tosh's fixed costs are unavoidable,but the company could use the vacated production facilities to earn an additional $5,000 of profit per month.In order to maximize operating income,Tosh should outsource.

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