Crane company must decide whether to make or buy some of its components. The cost of producing 62,500 switches for its generators are as follows.

Direct materials $30,700 Variable overhead $45,800

Direct labor $21,150 Fixed overhead $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 of the variable costs and one fourth of the fixed costs will be eliminated.

Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Make Buy Increase (Decrease) Direct materials $ $ $ Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost $ $ $ Wilma Company will incur $ of additional costs if it the switches