Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 54% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.92 and $4.64, respectively. Normal production is 26,000 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.30 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $46,700 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ 101920 i 101920 Direct labor 120640 120640 Variable overhead costs 65145 65145 Fixed manufacturing costs 46700 46700 0 Purchase price 345800 -345800 Total annual cost 334405 334405 392500 392500 -58095 (b) Should Pottery Ranch buy the finials? NO , Pottery Ranch should not buy the finials. Would your answer be different in (b) if the productive capacity released by not making the finials could be used to produce income of $66,194? Yes ), income would increase bys 8099