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

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Wilma Company must decide whether to make or buy some of its components. The costs of producing 61,300 switches for its generators are as follows.

Direct materiais $30,100 Variable overhead $44,600

Direct tabor $26,670 Fixed overhead $76,400

Instead of making the switches at an average cost of $2.90 ($177,770 + 61,300), the company has an opportunity to buy the switches at $2.72 per unit. If the company purchas:
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 e.g. -45 or parentheses e.g. (45).)
Net Income

Make Buy Increase (Decrease)
Direct materials $ $ 5
Direct labor
Variable manufacturing costs
Fixed manufacturing costs
Purchase price
Total cost $ $ $
Wilma Company will incur $ of additional costs if it the switches.

Would your answer be different if the released productive capacity wil generete additional income of $50,176? (Enter negative amounts using either a negative sign
preceding the number e.g. -45 or parentheses e.g. (45).)
Net Income
Make Buy Increase (Decrease)
Total Cost $ $ $
Opportunity cost
Total cost $ $ $