Ayayai 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 63% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.59 and $4.97, respectively. Normal production is 32,100 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.37 per unit. If Ayayai accepts the suppliers offer, all variable manufacturing costs will be eliminated, but the $49,400 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.

Prepare the incremental analysis Tor the decision to make or buy the Tihlals. Round answers to U decimal places, e.g. 1250. IT amount decreases net income then enter the amount using elti e.g. (45).) Make Buy Net Income Increase (Decrease) Direct materials Direct labor Variable overhead costs Fixed manufacturing costs Purchase price Total annual cost LINK TO TEXT VIDEO: APPLIED SKILLS x Your answer is incorrect. Try again. Should Ayayai buy the finials? No 7 Ayayai should be the finials. LINK TO TEXT VIDEO: APPLIED SKILLS Your answer is partially correct. Try again. Would your answer be different in previous part if the productive capacity released by not making the finials could be used to produce income of $60,293? Yves v) income would increase v Yes y income would increase