Reference no: EM132510021

Maplewood 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$30,100

Direct labour42,140

Variable overhead$51,170

Fixed overhead57,792

• Instead of making the switches at an average cost of $3.01 ($181,202 ÷ 60,200), the company has an opportunity to buy the switches at $2.81 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated.

Question 1: 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).)