Instructions: Calculate the incremental benefit or cost of making decorated vases Product Plain Vases Cost Information Units $ Sales 30,000.00 1,800,000.00 Costs @ 80% capacity Direct materials 4.00 120,000.00 Direct labor 15.00 450,000.00 Variable OH ($.50 per DL$) 7.50 225,000.00 Fixed OH ($.70 per DL$) - allocated 10.50 315,000.00 Total cost 37.00 1,110,000.00 Variable selling expense (commissions of 4% of sales dollars) Fixed selling expense (allocated based on units sold) 2.40 0.50 72,000 15,000 If we add additional decoration to our vases, they can be sold for $100 each. We estimate market demand for decorated vases is 10,000 units Incremental cost Direct materials Direct labor Variable OH Fixed OH Details of new machine 8.00 13.00 8.45 to process further would require one new machine. Cost is $100,000 with a useful life of 10 years and $0 salvage value Incremental Benefit of processing further Incremental Revenue Incremental Cost: DM DL