Wilma Company must decide whether to make or buy some of its components. The costs of producing 65,900 switches for its generators are as follows.

Direct materials $31,000 Variable overhead $44,800 Direct labor $37,028 Fixed overhead $79,600

Instead of making the switches at an average cost of $2.92 ($192,428 65,900), the company has an opportunity to buy the switches at $2.75 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 buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

	Make	Buy	Net Income Increase/Decrease
Direct Materials
Direct Labor
Variable Manufacturing Costs
Fixed Manufacturing Costs
Purchase Price
Total Cost

Would your answer be different if the released productive capacity will generate additional income of $52,747

	Make	Buy	Net Income Increase/Decrease
Total Cost
Oppurtunity Cost
Total Cost