Problem 7.35A a-c The management of Borealis Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called WISCO. is a component of the company's finished product The following information was collected from the accounting records and production data for the year ending December 31, 2020: 1. The machining department produced 7.600 units of WISCO during the year. 2. Variable manufacturing costs applicable to the production of each WISCO unit were direct materials $4.90, direct labour $4.30, indirect labour $0.43, and utilities $0.34 3. Foxed manufacturing costs applicable to the production of WISCO were as follows: Allocated Cost Item Depreciation Property taxes Insurance Direct $1.910 540 920 $3.370 $900 105 560 $1.565 The company will eliminate all variable manufacturing and direct fixed costs fit purchases WISCO. Allocated costs will have to be absorbed by other production departments 4. The lowest quotation for 7.600 WISCO units from a supplier is $75.550. 5. I WISCO units are purchased, freight and inspection costs would be $0.45 per unit, and the machining department would incur receiving costs totalling $1,310 per year. Managerial Accounting, Fifth Canadian Edition REVIEW MANAGERIAL ACCOUNTING (BU PRINTER VERSION BACK Receiving costs purchased, freight and inspection costs would be 50.45 per unit, and the machining department would incur receiving costs totalling $1,310 per year. Freight costs tal analysis for WISCO (If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15.000 or parenthesis, c.9. (15,000).) Purchase price Make Wisco Buy Wisco Met Income Increase (Decrease) Direct materials Direct labour Foxed costs Indirect labour Total annual cost Based on your analysis, what decision should management make? The company should WISCO Would the decision be different if Borealis had the opportunity to produce $2,750 of net income with the facilities currently being used to manufacture WISCO? (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. 15,000 or parenthesis, e.g. (15,000).) Net income will be Make Wisco Buy Wisco Increase (Decrease) Total annual cost Opportunity cost Total cost