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Maplewood Company must decide whether to make or buy some of its components. The costs of producing 60,800 switches for its generators are as follows.

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Maplewood Company must decide whether to make or buy some of its components. The costs of producing 60,800 switches for its generators are as follows. $51,680 Direct materials Direct labour $29,184 Variable overhead 43,168 Fixed overhead 62,016 Instead of making the switches at an average cost of $3.06 ($186,048 + 60,800), the company has an opportunity to buy the switches at $2.86 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated. Prepare an incremental analysis showing whether the company should make or buy the switches. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number e.g.-15,000 or parenthesis, e.g. (15,000).) Net Income Increase (Decrease) Per Unit Make Buy Number of units: $ The company should the components. Would your answer be different if the released productive capacity will generate additional income of $31,584? If the released capacity can generate additional income of $31,584, then the company should the components. Question Attempts: 0 of 1 used

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