Exercise 20-8 Your answer is partially correct. Try again. Innova uses 1,070 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows. Direct materials Direct labor Overhead Total $63.96 41.72 126.50 $232.18 Overhead costs include variable material handling costs of $7.44, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 60% variable costs and 40% fixed costs. A vendor has offered to supply the IMC2 component at a price of $250 per unit. (a) Prepare the incremental analysis for the decision to make or buy IMC2. Buy IMC2 (per unit) Make IMC2 (per unit) 63.96 Net Income Increase (Decrease) -63.96 Direct material Direct labor 41.72 Material handling - 7.44 -41.72 -7.44 -71.44 Variable overhead Purchase price -250 Total unit cost 184.56 250 Should Innova purchase the component from the outside vendor if Innova's capacity remains idle? Tno v Click if you would like to Show Work for this question: Open Show Work