X purchases 20,000 engines from an outside supplier for $45.00 each. X uses the engines in the ACs that they sold to customers. Now, company management is considering whether to make the engine parts internally. To make 20,000 engines internally, X estimates the average product cost to be $51.00, with total variable expenses = $700,000. Of the fixed expenses, $150,000 represent existing costs reallocated to engines. The remaining fixed expense represents the salary of a new supervisor. X will set up engine production in space currently rented to another company. The rent lost by making the engines internally = $40.000.

Question: What's the impact on income if X begins making engines internally and eliminates the outside supplier?

a. Income will increase $61,000

b. Income will decrease $10,000

c. Income will decrease $160,000

d. Income will increase $10,000

e. None of the other answers are correct