Incremental Analysis 1. Elegant Curtains Co. has been manufacturing its own tassels for its curtain products. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 60% of direct labor cost. The direct materials and direct labor cost per unit to make a tassel are $3 and $4, respectively. Normal production is 50,000 tassels per year. A supplier offers to make tassels at a price of $8.50 per unit. If Elegant Curtains accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $30,000 of fixed manufacturing overhead currently being charged to the tassels will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the tassels. (b) Should Elegant Curtains buy the tassels? () Would your answer be different in (b) if the productive capacity released by not making the tassels could be used to produce additional income of $15,000