engstrom inc uses 10 000 pounds of a specific component in the production of lif 381393

Engstrom, Inc., uses 10,000 pounds of a specific component in the production of life preservers each year. Presently, the component is purchased from an outside supplier for $11 per pound. For some time now, the factory has had idle capacity that could be utilized to make the component. Engstrom’s costs associated with manufacturing the component are as follows: Direct material per pound: $3 Direct Labor per pound $3 Variable Overhead per Pound $2 Fixed Overhead per unit (based on annual production of 10,000 pounds) $2 In addition, if the component is manufactured by Engstrom, the company will hire a new factory supervisor at an annual cost of $32,000. Required: If Engstrom chooses to make the component instead of buying it from the outside supplier, what would be the change, if any, in the company’s income?