et ple the art aled asco-emp OURCEST The managem ento Shat er Manufact ng Companys trying to decide whether to connue ma dot ring , part o to buy tho-an ots de t company's finished product. The foliowing information was collected from the accounting records and production deta for the year ending December 31, 2017 1. 8,000 units of CISCO were produced in the Machining Department LPart rib manuscturing coets anoiadle to the preduction of esch ciscout direct materials $4.61, direct labor $4.48, indirect labor $0.48, utilities so.41 3. Fixed manufacturing costs applicable to the production of CiscO were Cost item Direct Allocated by Study Depreciation $2,000$920 480 410 890 600 $3,370 $1,930 Insurance All variabie manufacturing and direct fixed costs will be elminates if CISCO is purchased. Allocated cests will have to be absorbed by other production departments 4. The lewest quotation for 8,000 CISCO unts from a supplier is $80,520. 5. It CISCO units are purchased, freight and inspection costs wouid be s0.35 per unit, and receriving costs totaling $1,280 per year would be incurred by the Machining Department (e) Prepare an incremental enalysis for CISCO. (Enter negative amounts using either a negative sign preceding the number a.9.-45 or parentheses e.s (45). Net Income Make CISCO Buy CISCO (Decrease) Direct material Direct labor All Rights Version 4.24 12 Increase Make CISCO Buy CISCO (Decrease) Direct material Direct labor Indirect labor Utides Property taxes Insurance Purchase price Freight and inspection Receliving costs Total annual cos (b) Based on your analysis, what decision should management make? The company should vaca hkr 2000:2212)itnynezkSonkh. All Rights Reserved. A Division of hateeyASonu Version 4.24