Ivanhoe Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 11,600 units of subcomponent JXY per month. Direct materials costs $39,000 Direct labour costs 31,100 Variable overhead 15,000 Fixed overhead* 13,100 *Fixed overhead includes $4,100 supervisor's salary. International Firm agrees to supply Ivanhoe with 11,600 units per month for a total cost of $132,750. If subcomponent JXY is outsourced, Ivanhoe will be able to increase the production and sales of its final product by 1,050 units per month; the product is sold for $105 per unit and its average variable costs per unit are $70. The supervisor's salary will be eliminated if subcomponent JXY is outsourced. Prepare an incremental analysis for subcomponent JXY. (If an amount reduces the incremental costs then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Incremental Costs (Savings) Make Buy $ O $ 132750 $ 132750 39000 -39000 31100 -31100 d 15000 - 15000 13100 9000 -4100 36750 -36750 st TA 134950 $ 141750 $ 6800 (b) Based on your analysis, what decision should management make? anagement should decide to JXY as it would cost an additional $ if they were to . Save for Later Attempts: 0 of 2 used Submit