$22.$ Tikky Tok Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Tikky for $$420$ each. Tikky needs $1,200$ clocks annually. Tikky Tok has provided the following unit costs for its commercial clocks:

Direct materials: $$100$

Direct labor: $140$

Variable overhead: $80$

Fixed overhead $(40\%$ avoidable$)$: $150$

Instructions:

Using incremental analysis, should the company continue to make the product or buy it from the outside supplier? Why? Cite your calculations in your response.