cu piuuuce UI dry UI the four parts. Show all your calculation. re incremental analysis related cake-or-buy decision, consider unity cost, and identify nancial factors. P7.49B (LO 2, 3) The management of Dunham Manufacturing Company has asked for you ! deciding whether to continue manufacturing a part or to buy it from an outside supplier. The part, canca Tropica, is a component of Dunham's finished product. Problems: Set B 313 An analysis of the accounting records and the production data revealed the following information for the year ending December 31, 2020: 1. The machinery department produced 40,000 units of Tropica. 2. Each Tropica unit requires 15 minutes to produce. These people in the machinery department work full-time (2,500 hours per year each) producing Tropica. Each person is paid $15 per hour. 3. The cost of materials per Tropica unit is $3. 4. Manufacturing costs directly applicable to the production of Tropica are as follows: indirect labour, $6.000; utilities, $1,500; depreciation, $2,000; property taxes and insurance, $2,000. All of the costs will be eliminated if the company purchases Tropica. 5. The lowest price for Tropica from an outside supplier is $6 per unit. Freight charges would be $0.50 per unit, and the company would require a part-time receiving clerk at $10,000 per year. 6. If it purchases Tropica, Dunham will use the excess space that becomes available to store its fin- ished product. Currently, Dunham rents storage space at approximately $1.50 per unit stored per year. It stores approximately 6,000 units per year in the rented space. @MI Increase $ 20.500 a. Nt decrease $19,000 Instructions a. Prepare an incremental analysis for the make-or-buy decision. Should Dunham make or buy the part? Why? b. Prepare an incremental analysis, assuming the released facilities (freed-up space) can be used to produce $15,000 of net income in addition to the savings on the rental of storage space. What deci- sion should the company make now? c. What non-financial factors should it consider in the decision? b. Nt decrease $4,000 6 MI Increase 135 E 35 sco