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Wilma Company must decide whether to make or buy some of its components. The costs...

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Accounting

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Wilma Company must decide whether to make or buy some of its components. The costs of producing 60,200 switches for its generators are as follows. Direct materials $29.900 Variable overhead $45,700 Direct labor $25,990 Fixed overhead $76,000 Instead of making the switches at an average cost of $2.95 ($177,590 +60,200), the company has an opportunity to buy the switches at $2.67 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated (a) Make 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 e3.-45 or parentheses 68 (451) Net Income Buy Increase (Decrease) Direct materials 29.900 Direct labor 25.990 Variable 45.700 manufacturing costs Fixed manufacturing 76,000 0 0 0 costs Purchase price Total cost Wilma Company will incur $ of additional costs if it - the switches

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