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please help The management of Blue Manufacturing Company is trying to decide whether to continue manufacturing a partor to buy it from an outside supplier.
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The management of Blue Manufacturing Company is trying to decide whether to continue manufacturing a partor to buy it from an outside supplier. The part,called Cisco is a component of the company's finished product. The following information was collected from the accounting records and production data for the year anding Decembar 21, 2017 1.7.900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of wech Qismo unit were: direct materials $5.08, direct labor $415. indirect labor SO 41, utilities $0.44 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Depreciation Property taxes Insurance Direct $1,900 540 Allocated S910 340 590 $3,360 $1,820 All variable manufacturing and direct fixed costs will be eliminated if CISOs purchased. Allocated costs will have to be absorbed by other production departments 4. The lowest Quotation for 2.900 CISCO units from a supplier is $79.899. 5.FCISCO units are purchased, freight and inspection costs would be $0.37 perunit, and receiving costs totaling $1.270 per year would be incurred by the Machining Department Prepare an incremental analysis for Cisco. (famount decreases net income then enter the amount using either a negative sur preceding the number 45 or parentheses e 145.3 Net Income Increase (Decrease) Make CISCO Buy CISCO S 9 Direct labor Proosssy taxes Insurance Purchase price inspection Total annual $ s e Textbook and Media Based on your analysis, what decision should management maks? The company should e Textbook and Media Would the decision be different Blue Company has the opportunity to produce $3.000 of net income with the facilities currently being used to manufacture disco e Textbook and MediaStep by Step Solution
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