Do It! Review 21-3 Wilma 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. Direct materials $29,700 Variable overhead $45,400 Direct labor $29,675 Fixed overhead $79,600 Instead of making the switches at an average cost of $2.95 ($184,375 62,500), the company has an opportunity to buy the switches at $2.67 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated