For Practice only: Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one of its suppliers to make the 14,000 awnings it needs for $33 each. Old Camp's costs to make the awning are $20 in direct materials and $7 in direct labor. Variable manufacturing overhead is 80 percent of direct labor. If Old Camp accepts the offer, $50,000 of fixed manufacturing overhead currently being charged to the awnings will have to be absorbed by other product lines.

Required:

1.Complete the incremental analysis for the decision to make or buy the awnings in the table provided below.

Make Buy Net Income (Increase or Decrease)

Direct Material

Direct Labor

Variable Over Head

Fixed Over heard

Purchase Power

Total