Notson, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Notson for $420 each. Notson needs 1,200 clocks annually. Notson has provided the following unit costs for its commercial clocks:

Direct materials		$100
Direct labor		140
Variable overhead		80
Fixed overhead (40% avoidable)		150

Prepare an incremental analysis which shows the effect of the make-or-buy decision. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Incremental Analysis				Incremental Effect
Incremental net cost to buySavings of direct materialCost savingsCost to buySavings of fixed overheadSavings of direct laborSavings of variable overheadIncremental net cost to makeTotal cost savingsCost to make Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make				$
Savings of direct laborSavings of direct materialTotal cost savingsCost to buyIncremental net cost to makeSavings of variable overheadIncremental net cost to buyCost to makeCost savingsSavings of fixed overhead Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make
Cost to makeIncremental net cost to buySavings of variable overheadIncremental net cost to makeSavings of fixed overheadCost to buyCost savingsTotal cost savingsSavings of direct laborSavings of direct material Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make		$
Savings of fixed overheadSavings of variable overheadIncremental net cost to makeCost to buySavings of direct laborTotal cost savingsIncremental net cost to buyCost to makeCost savingsSavings of direct material Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make
Savings of direct materialCost to makeIncremental net cost to buyCost savingsCost to buySavings of direct laborTotal cost savingsSavings of fixed overheadIncremental net cost to makeSavings of variable overhead Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make
Cost to makeTotal cost savingsIncremental net cost to makeSavings of direct materialCost savingsCost to buySavings of fixed overheadSavings of direct laborSavings of variable overheadIncremental net cost to buy Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make
Incremental net cost to makeIncremental net cost to buySavings of direct laborTotal cost savingsCost to buyCost to makeSavings of direct materialSavings of variable overheadCost savingsSavings of fixed overhead Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make
Savings of fixed overheadSavings of variable overheadCost to makeCost to buyIncremental net cost to buySavings of direct materialSavings of direct laborCost savingsTotal cost savingsIncremental net cost to make Cost to buyCost savingsSavings of direct materialSavings of direct laborSavings of variable overheadSavings of fixed overheadTotal cost savingsIncremental net cost to buyIncremental net cost to makeCost to make				$