Buddy Pets has recently started to manufacture talking toy pets. The cost structure to manufacture 13,700 of these toy pets is as follows: Direct materials ($32 per pet) Direct labour ($26 per pet) Variable overhead ($11 per pet) Allocated fixed overhead ($24 per pet) $438,400 356,200 150,700 328,800 $1,274,100 Total Buddy Pets is approached by Maxum Inc., which offers to make the toy pets for $80 per unit. Using incremental analysis, determine whether Buddy Pets should accept this offer under each of the following independent assumptions: Prepare an incremental analysis. Assume that $137,000 of the fixed overhead cost (in making 13,700 of the toy pets) is avoidable. (Enter savings with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Cost Make Buy Cost (Saving) $ Net income / (loss) Purchase price Direct materials Fixed overhead Direct labour Sales Variable overhead Total annual cost $ Should Buddy Pets continue to make the pets or buy the pets? Buddy Pets should the pets. Prepare an incremental analysis. Assume that none of the fixed overhead is avoidable. However, if the pets are purchased from Maxum, Buddy Pets can use the released productive resources to generate additional income of $216,900. (Enter savings with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Prepare an incremental analysis. Assume that none of the fixed overhead is avoidable. However, if the pets are purchased from Maxum, Buddy Pets can use the released productive resources to generate additional income of $216,900. (Enter savings with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Cost Make Buy Cost (Saving) $ Fixed overhead Variable overhead Purchase price Sales Direct labour Net income Direct materials Total annual cost : Opportunity cost Total cost $ $ $ Should Buddy Pets continue to make the pets or buy the pets? Buddy Pets should the pets