Make or Buy: Effect on Income

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:

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?