A company manufactures a product that contains a circuit board: The company has always

purchased this circuit board from a supplier for $$32$ each. The company recently upgraded its own

manufacturing capabilities and now has enough excess capacity $($including trained workers$)$ to begin manufacturing the circuit board instead of buying it$.$ The company prepared the following per

unit cost projections of making the circuit board, assuming that overhead is allocated to the part at

the normal predetermined overhead rate of $110\%$ of direct labor cost.

Direct materials $$5$

Direct labor $23$

Overhead $($fixed and variable$)$

$25\mathrm{.}30$

Total

$$53\mathrm{.}30$

The required volume of output to produce the circuit boards will not require any

incremental fixed overhead. Incremental variable overhead cost is $$4$ per circuit board.

What is the effect on income if the company decides to make the circuit boards?

Income will increase by $$2$ per unit.

Income will increase by $$4$ per unit.

Income will decrease by $$7$ per unit.