Company B is not operating at full capacity. Management needs to decide whether to buy a part from an outside supplier for $12.80 or make the part themselves for $13.80. If the company purchases the 10,000 parts it needs, it can use the released productive capacity to generate additional income of $1,000 from producing a different product. Direct materials: $80,000 Direct labor $10,000 Variable overhead $18,000 fixed overhead $12,000. If the company purchases the part, all variable costs and one-third of the fixed costs will be eliminated. Make Buy Net Income +/- Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Opportunity cost Total annual cost Prepare an incremental analysis (3 pts), what would you recommend to management? (Determine answer by completing the table above.) Should the company make or buy the part? Explain your answer including quantitative data. (2 pts)

Company B is not operating at full capacity. Management needs to decide whether to buy a part from an outside supplier for $12.80 or make the part themselves for $13.80, If the company purchases the 10,000 parts it needs, it can use the released prodictive capacity to generate additional income of $1,000 from producing a different product. Direct materials: $80,000 Direct labor $10,000 Variable overhead $18,000 fixed overhead $12,000. If the company purchases the part all variable costs and one-third of the foxed costs will be eliminated. Prepare an inciemental analysis ( 3 pls), what would you recommend to management? (Determine answer by completing the table above) Should the company make or buy the part? Explain your answer induding quantitative data. (2. pts)