Maplewood Company must decide whether to make or buy some of its components. The costs of producing 60,100 switches for its generators are as follows.

Direct materials		$30,651		Variable overhead		$43,873
Direct labour		42,070		Fixed overhead		61,302

Instead of making the switches at an average cost of $2.96 ($177,896 60,100), the company has an opportunity to buy the switches at $2.76 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated.

(a)

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).)

				Per Unit		Make		Buy		Net Income Increase (Decrease)
Number of units:		enter a number of units
select an item Purchase priceManufacturing overheadTotal annual costCost of good soldFixed manufacturing costsVariable manufacturing costs				$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an item Cost of good soldVariable manufacturing costsFixed manufacturing costsManufacturing overheadPurchase priceTotal annual cost				enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select an item Fixed manufacturing costsVariable manufacturing costsCost of good soldTotal annual costManufacturing overheadPurchase price				enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select an item Cost of good soldFixed manufacturing costsPurchase priceVariable manufacturing costsManufacturing overheadTotal annual cost						$enter a total amount		$enter a total amount		$enter a total amount

The company should select an option buymake the components.

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(b)