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 $29,400 Direct labor $42,526 Variable overhead $45,300 Fixed overhead $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. 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 29,400.00 0 29,400.00 $ Direct labor 42,526.00 0 42,526.00 Variable manufacturing costs 45,300.00 0 45,300.00 Fixed manufacturing costs 82,400.00 61,800.00 20,600.00 X 1,81,972.00 Purchase price 0 1,81,972.00 Total cost 1,99,626.00 2,43,772.00 44,146.00 44,146 buys Wilma Company will incur $ of additional costs if it the switches. Your answer is partially correct. Try again. 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 x Total Cost 1,99,626.00 2,43,772.00 44,146.00 X Opportunity cost 0 47,816.00 47,816.00 x Total cost 1,99,626.00 1,95,956.00 3,670.00 Yes v different v increased v 3,670 the answer is The analysis shows that net income will be by $1 Click if you would like to Show Work for this question: Open Show Work