R&R Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for R&R for $270 each. R&R needs 1,500 clocks annually. R&R has provided the following unit costs for its commercial clocks: Direct materials $100 Direct labor 110 Variable overhead 30 Fixed overhead (70% avoidable) 150
Instructions Prepare an incremental analysis, which shows the effect of the make-or-buy decision.