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Pharoah Company must decide whether to make or buy some of its components. The costs of producing 59,300 switches for its generators are as follows.

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Pharoah Company must decide whether to make or buy some of its components. The costs of producing 59,300 switches for its generators are as follows. Direct materials $29,057 Variable overhead $50,998 Direct labour 41,510 Fixed overhead 58,707 Instead of making the switches at an average cost of $3.04 ($180,272 : 59,300), the company has an opportunity to buy the switches at $2.84 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 Number of units: $ $ The company should the components.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).) Net Income Increase Per Unit Make Buy (Decrease) $ $ $ $ The company should v the components

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