Question 5 Maplewood Company must decide whether to make or buy some of its components. The costs of producing 59,000 switches for its generators are as follows. Direct materials $30,090 Variable overhead $40,120 Direct labour 40,710 Fixed overhead 63,720 Instead of making the switches at an average cost of $2.96 ($174,640 = 59,000), the company has an opportunity to buy the switches at $2.76 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated. (a) Your answer is partially correct. Try again. 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 (Decrease) Per Unit Make Buy Number of units: 59000 Variable manufacturing costs 1.88 110920 110920 $ x x Fixed manufacturing costs 0.36 21240 21240 Purchase price 2.76 162840 - 162840 Total annual cost 132160 162840 -30680 make The company should the components