Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one of its suppliers to make the 14,000 awnings it needs for $31 each. Old Camps costs to make the awning are $18 in direct materials and $7 in direct labor. Variable manufacturing overhead is 70 percent of direct labor. If Old Camp accepts the offer, $48,000 of fixed manufacturing overhead currently being charged to the awnings will have to be absorbed by other product lines.

valuc: .61 points Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one of its suppliers to make the 14,000 awnings it needs for $31 each. Old Camp's costs to make the awning are S18 in direct materials and S7 in direct labor. Variable manufacturing overhead is 70 percent of direct labor. If Old Camp accepts the offer, $48,000 of fixed manufacturing averhead currently being charged to the awnings will have to be absorbed by other product lines. Required: 1. Complete the incremental analysis for the decision to make or buy the awnings in the table provided below. Net Income Increase (Decrease) Make Buy Direct Materials Direct Labor Variable OH Fixed OH Purchase Price -L