Current Attemptin Progress

$($a$)$

Tamarisk Inc. has been manufacturing its own shades for its table lamps. The company is currently

operating at $100\%$ of capacity, and variable manufacturing overhead is charged to production at

the rate of $70\%$ of direct labour costs. The direct materials and direct labour costs per unit to

make the lampshades are $$4\mathrm{.}70$ and $$6\mathrm{.}00,$ respectively. Normal production is $49,300$ table lamps

per year.

A supplier offers to make the lampshades at a price of $$15\mathrm{.}20$ per unit. If Tamarisk Inc. accepts the

supplier's offer, all variable manufacturing costs will be eliminated, but the $$40,900$ of fixed

manufacturing overhead currently being charged to the lampshades will have to be absorbed by

other products.

Prepare the incremental analysis for the decision to make or buy the lampshades. $($Round

answersto $0$ decimal places, e$.$g$.5,275.$ If an amount reducesthe net income then enter with a

negative sign preceding the number e$.$g$.-15,000$ or parenthesis, e$.$g$.(15,000).$ While alternate

approaches are possible, irrelevant fixed costsshould be included in both options when solving this

problem. Do not leave any answer field blank. Enter $0$ for amounts.$)$

Number of units: $49,300$ Make B