Answer:
increase in income  of $80
Explanation:
Prepare an Analysis of Costs and Savings if the Company buys from Outside Supplier.
Note : The  fixed costs per unit at are unavoidable are irrelevant and disregarded in this decision.
Analysis of Costs and Savings
Purchase Price (400 widgets × $44.00)  =   ($17,600)
Savings :
Variable Costs ($35.60 × 400 widgets)  =   $14,240
Fixed Cost ( $8.60 × 400 widgets)      =    $3,440
Net Income effect                    =      $80
Conclusion :
The effect on net income if the company instead buys the widgets is an increase in  income  of $80