Crane Company must decide whether to make or buy some of its components. The costs of producing 62,500 switches for its generators are as follows $30,700 $45,800 Direct materials Direct labor Variable overhead Fixed overhead $21,150 $83,600 Instead of making the switches at an average cost of $2.90 ($181.250 +62,500), the company has an opportunity to buy the switches at $2.72 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated Make Buy Increase (Decrease) Direct materials $ 30700 30700 $ Direct labor 21150 i 21150 Variable manufacturing costs 45800 i 45800 Fixed manufacturing costs 83600 i 83600 0 Purchase price 170000 i - 170000 Total cost 181250 $ 86400 $ -51450 Crane Company will incurs 51450 of additional costs if it buys the switches, e Textbook and Media JUGUET