Surger Inc. manufactures machine parts for aircraft engines. Surger management is considering an offer from a subcontractor that would provide 2,400 units of product AL107 for a price of $187,200.

The cost to produce AL107 internally is:

	Cost per unit
Direct Materials	$41
Direct Labor	$27
Variable Overhead	$12
Allocated fixed overhead	$4

A) For this short-term decision, what is the relevant cost per unit to make part AL207 internally?

B) What is the estimated increase or decrease in short-term operating income if Surger makes the part internally and does not buy the part from the subcontractor?