Bill Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows.

Direct materials$29,000

Variable overhead$44,400

Direct labor$28,644

Fixed overhead$82,000

Instead of making the switches at an average cost of $2.94 ($184,044 62,600), the company has an opportunity to buy the switches at $2.69 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

a. an incremental analysis showing whether the company should buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Make ? Buy ? Net Income - Increase (Decrease) ?

Direct materials$:

Direct labor:

Variable manufacturing costs:

Fixed manufacturing costs:

Purchase price:

Total cost:

b.Would your answer be different if the released productive capacity will generate additional income of $48,000?(Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)