Do It! Review 7-3 Wilma Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for its generators are as follows. Direct materials Direct labor $29,400 $42,526 Variable overhead Fixed overhead $45,300 $82,400 Instead of making the switches at an average cost of $2.94 ($199,626 = 67,900), the company has an opportunity to buy the switches at $2.68 per unit. If the company purchases the switches, all 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).) Make Buy Net Income 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. Would your answer be different if the released productive capacity will generate additional income of $47,816? (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 Total Cost $ A Opportunity cost Total cost C , the answer is . The analysis shows that net income will be by $