Oriole Company must decide whether to make or buy some of its components. The costs of producing 60,200 switches for its generators are as follows.

Direct materials		$29,900		Variable overhead		$45,700
Direct labor		$25,990		Fixed overhead		$76,000

Instead of making the switches at an average cost of $2.95 ($177,590 60,200), the company has an opportunity to buy the switches at $2.67 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Make		Buy		Net Income Increase (Decrease)
Direct materials		$		$		$
Direct labor
Variable manufacturing costs
Fixed manufacturing costs
Purchase price
Total cost		$		$		$

Would your answer be different if the released productive capacity will generate additional income of $44,024? (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Make		Buy		Net Income Increase (Decrease)
Total Cost		$		$		$
Opportunity cost
Total cost		$		$		$

. The analysis shows that net income will be

increased by $