PRINTER VERSION 1BACK NE Question 5 Maplewood Company must decide whether to make or buy some of its components. The costs of producing 60,800 switches for its generators are as follows. Direct materials $30,400 Variable overhead $39,520 Direct labour 42,560 Fixed overhead 58,368 Instead of making the switches at an average cost of $2.81 ($170,848 - 60,800), the company has an opportunity to buy the switches at $2.61 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).) Net Income Increase Per Unit Make Buy (Decrease) Number of units: 60800 Variable manufacturing costs v 1 85 Fixed manufacturing costs 0.96 58368 Purchase price 2.61 Total annual cost The company should make v the components LINK TO TEXT