R&R Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for R&R for $270 each. R&R needs 1,500 clocks annually. R&R has provided the following unit costs for its commercial clocks:

Direct materials	$100
Direct labor	110
Variable overhead	30
Fixed overhead (70% avoidable)	150

Instructions

Prepare an incremental analysis, which shows the effect of the make-or-buy decision.