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 supervisors 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 supervisors salary will be eliminated if subcomponent JXY is outsourced.

Prepare an incremental analysis for subcomponent JXY.

Incremental Costs (Savings) Make Buy ta $ TA $ ta ta $ $ ta