PA7-9 Analyzing Make-or-Buy Decision [LO 7-2, 7-4] 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 13,000 awnings it needs for $28 cach. Old Camp's costs to make the owning are $15 in direct materials and $7 in direct labor. Variable manufacturing overhead is 70 percent of direct labor. If Old Camp accepts the offer, $45,000 of fixed manufacturing overhead currently being charged to the awnings will have to be absorbed by other product Required: 1. Complete the incremental analysis for the decision to make or buy the awnings in the table provided below. Net Income Buy Decreas) $ 13,000 13,000 Direct Materials Direct Labor Variable OH bod OH Purchase Price Total 2. Should Old Camp continue to manufacture the awnings or should they purchase the awnings from the supplier? Manufacture Purchase 3. Assuming that the capacily released by purchasing the awnings allowed Old Camo lo record a profit of $22.000, should Old Camp continue to manufacture of purchase the awnings? Purchase Manufacture