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- Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as

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- Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows. $30,200 Direct materials Direct labor $44,800 Variable overhead Fixed overhead $31,844 $77.200 Instead of making the switches at an average cost of $2.94 ($184,044 + 62,600), the company has an opportunity to buy the switches at $2.73 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg, -45 or parentheses eg. (45.) Net Income Increase (Decrease) Make Buy Direct materials $ Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost $ Wilma Company will incur $ of additional costs if it the switches

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