Do It! Review 7-3 Wilma Company must decide whether to make or buy some of its components. The costs of producing 60,200 switches for its generators are as follows. Direct materials $29,900 Variable overhead $45,700 Direct labor $25,990 Fixed overhead $76,000 Instead of making the switches at an average cost of $2.95 ($177,590 = 60,200), 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. 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 29900 0 29900 Direct labor 25990 0 25990 Variable manufacturing costs 45700 45700 x Fixed manufacturing costs 19000 76000 19000 Purchase price 160734 -160734 37 +370 X Fixed manufacturing costs 19000 76000 19000 Purchase price 0 160734 -160734 X Total cost 120590 160734 -40144 40144 buys Wilma Company will incur of additional costs if it the switches. . LINK TO TEXT Your answer is partially correct. Try again. Would your answer be different if the released productive capacity will generate additional income of $44,024? (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 120590 160734 -40144 Opportunity cost 44024 0 44024 Brief Exercise 7-4 Your answer is partially correct. Try again. Manson Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 17,800 of the assembly part at $5 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (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 Variable manufacturing costs x Fixed manufacturing costs indi indi X x Purchase price X Total annual cost X The decision should be to the part. Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT