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QUESTION 10 Maplewood Company must decide whether to make or buy some of its components. The costs of producing 59,300 switches for its generators are
QUESTION 10 Maplewood 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 $30,243 Variable overhead $53,370 Direct labour 42,696 Fixed overhead 60,486 Instead of making the switches at an average cost of $3.15 ($186,795 = 59,300), the company has an opportunity to buy the switches at $2.95 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated. Using an incremental analysis whether the company should make or buy the switches. What is the total Net Income Increase (Decrease)? (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
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