GIVE AN Analysis of the Outsourcing Proposal A. Incremental Costing Analysis 1. Calculation and discussion of incremental costs associated with outsourcing B. Effects on Reported Profits 1. Examination of how outsourcing impacts reported profits C. Other Factors to Consider 1. Discussion of non-financial effects of outsourcing 2. Identification and analysis of other relevant factors affecting the decision. IN LIGNE WITH In Management Accounting, you are required to compile a report on the Fleet Ltd case study. Colin Drury, cost& Management Accounting : An Introduction-Fleet Ltd. Fleet Ltd: Lin Fitzgerald, University of Warwick Business school. Additional information provided by the finance director If Charles Smith retired two years early the company would have to pay an extra 20 000 lump sum into the pension scheme. The building housing the IT department was on a three year lease and the company was committed to an annual rental of 10 000 per year for that period. This building could be sublet if IT were outsourced generating 4 000 in the first year, 8 000 in the second and 10 000 in the final year of the lease. Current forecasts of consumables in the IT department are 5000, 6000 and 7000 over the next three years. The resale value of the IT equipment bought last year is 30 000. Annual overheads for the IT department are 27 000 per year. 60% of the overhead varies with staff numbers, the remaining 40% is a share of central overhead charges. Required You have been appointed as a consultant to prepare a report analysing the outsourcing proposal, including both the financial and non-financial effects, and give your recommendations. Your report should include the following: 1. an incremental costing analysis; 2. the effects on reported profits; 3. discussion of other factors that need to be taken into account before a decision is made; 4. recommendations with reasons; 5. an executive summary. Your answer must be an analytical synthesis of numerous sources of information and references.