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- 16 View Policies Current Attempt in Progress Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently

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- 16 View Policies Current Attempt in Progress Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity and variable manufacturing overhead is charged to production at the rate of 62% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 30,400 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.15 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $43,100 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sig preceding the number eg. 45 or parentheses e8. (45)) Net Income Increase (Decrease) Make Buy Direct materials $ $ Direct labor Variable overhead costs Fixed manufacturing costs Purchase price $ $ $ Total annual cost (b) Should Pottery Ranch buy the finials? the finals Pottery Ranch should

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