I do not understand this problem please help me out with this problem.

Do It! Review 7-3 Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,500 switches for its generators are as follows. Direct materials $30,700 Variable overhead $45,800 Direct labor $21,150 Fixed overhead $83,600 Instead of making the switches at an average cost of $2.90 ($181,250 + 62,500), the company has an opportunity to buy the switches at $2.72 per unit. If the company purchases the switches, all the variable costs and one-fourth of the xed costs will be eliminated. Prepare an incremental analysis showing whether the company should 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 $ $ $ Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost $ $ $ Wilma Company will incur $ of additional costs if it the switches. LINK TO TEXT Would your answer be different if the released productive capacity will generate additional income of $55,470? (Enter negative amounts using eithera 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 $ $ $ A v 4 , the answer is . The analysis shows that net income will be by $