1) Pharoah Company must decide wether to make or buy some of its components...

Please answer B :)

Pharoah Company must decide whether to make or buy some of its components. The costs of producing 60,500 switches for its generators are as follows. Direct materials $29,600 Variable overhead $44,400 Direct labor $21,480 Fixed overhead $83,600 Instead of making the switches at an average cost of $2.96 ($179,080 + 60,500), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. (a) Your answer has been saved. See score details after the due date. Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).) Direct materials Make Buy 29.600 $ Direct labor 21.480 Variable manufacturing 44,400 costs Fixed manufacturing 83,600 costs Purchase price Total cost 0 Net Income Increase (Decrease) 0 29,600 0 21,470 10 44400 62,700 163,350 20,900 -163,350 $ 179,080 $ 226,050 $ -46,980 Pharoah Company will incur $ 46.980 of additional costs if it buys the switches.