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 Maplewood Company must decide whether to make or buy some of its components

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 Maplewood Company must decide whether to make or buy some of its components. The costs of producing 60,400 switches for its generators are as follows.

Instead of making the switches at an average cost of $2.95 ($178,180 ÷ 60,400), 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-third of the fixed costs will be eliminated.

a) 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).)

The company should select an option ________ buy make the components.

b). Would your answer be different if the released productive capacity will generate additional income of $30,484?

2. Waterloo Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $16, direct labour $11, and overhead $16 (75% variable). Waterloo Co. has sufficient capacity to accept a special order for 35,300 units, but at a discount of 25% from the regular price. Selling costs associated with this order would be $4 per unit. Determine whether Waterloo Co. should accept the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)