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

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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) 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 eg. (45)) Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost (b) $ Make Buy Net Income Increase (Decrease) S $ Pharoah Company will incur S of additional costs if it the switches makes buys Save for Later tempts: 0 of 1 used Submit Answer