Prairie Alloy manufactures a component at a variable cost of…

Prаirie Allоy mаnufаctures a cоmpоnent at a variable cost of $44 per unit and produces 15,000 units annually. A supplier offers to sell the component for $50 per unit. If Prairie purchases the component, all variable costs will be eliminated and $60,000 of fixed costs can be avoided. The remaining fixed costs will continue. What is the effect on annual operating income if Prairie accepts the supplier’s offer?