Carla Vista 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 60% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 26,600 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.25 per unit. If Carla Vista accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $42,600 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ 106400 0 $ 10.000 Direct labor 133000 1 0 133000 79800 i D 79800 Variable overhead costs Fixed manufacturing costs 42600 i 42600 Purchase price 0 352450 35250 Total annual cost $ 361800 1 395050 $ -33250 (b) Should Carla Vista buy the finials? No Carla Vista should not buy the finials. (c) Would your answer be different in (b) if the productive capacity released by not making the hnials could be used to produce income of $37.750? Yes income would increase by $