Do It! Review 7-3 Wilma Company must decide whether to make or buy some of its components. The costs of producing 65,700 switches for its generators are as follows. Direct materials $31,000 Direct labor $34,229 Variable overhead Fixed overhead $45,900 $84,000 Instead of making the switches at an average cost of $2.97 ($195,129 - 65,700), the company has an opportunity to buy the switches at $2.71 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Your answer is partially correct. Try again. 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 31000) -31000 Direct labor T 34229 -34229 Variable manufacturing costs 45900 -45900 X Fixed manufacturing costs 21000 -21000 Purchase price 178000 -178000 Total cost 132129 178000 45871 will incur 1 45871 45871 of additional costs ir ve buys buys 1 the switches. the switches. Wilma Company will incur $ Your answer is partially correct. Try again. Would your answer be different if the released productive capacity will generate additional income of $50,128? (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 132129 178000 -45871 Opportunity cost 50128 50128 Total cost 182257 178000 4257 7 Yes *), the answer is diferent 3). The analysis shows that net income will be increased 3 , Yes different | J. The analysis shows that net income will be increased 91 4257 4257 J, the answer is Click if you would like to Show Work for this question: Open Show Work