Your answer is partially correct. I ry again Prepare an incremental analysis sho

Question

Your answer is partially correct. I ry again Prepare an incremental analysis showing whether the company should make or buy the switches. (If amount decreases net income then enter preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials 29,000 29,000$ 25,000 44,000 Direct labor 25,000 Variable manufacturing 44,000 costs Fixed manufacturing costs Purchase price 76,000 159000 (159000) Total cost 174,000 Ayayai Company will incur$ of additional costs if it the switches

Explanation / Answer

Prepare incremental analysis :

Ayayai company will increase $42000 additional cost if it buy the switches

Make Buy Net inncome increase (decrease) Direct material 29000 0 29000 Direct labour 25000 0 25000 Variable manufacturing overhead 44000 0 44000 Fixed manufacturing cost 76000 57000 19000 Purchase price 0 159000 (159000) Total 174000 216000 (42000)

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