Assignment Gradebook ORION Downloadable Textbook ament CALCULATOR FULL SCREEN PRIN Indigo Company must decide whether to make or buy some of its components. The costs of producing 62,500 switches for its generators are as follows. Direct materials $29,700 Variable overhead $45,400 Direct labor $29,675 Fixed overhead $79,600 Instead of making the switches at an average cost of $2.95 ($184,375 + 62,500), the company has an opportunity to buy the switches at $2.67 per unit. If the compa the variable costs and one-fourth of the fixed costs will be eliminated. (a) Your answer is partially correct. Try again. Prepare an incremental analysis showing whether the company should make or buy the switches. (If amount decreases net income then enter the amount using preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy 29700 29700 Direct materials 29675 29675 Direct labor 45400 Variable manufacturing costs 45400 19900 Fixed manufacturing costs 59700 79600 184375 - 184375 Purchase price y Policy | R 2000-2020 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc