Problem 7.35A - The management of Borealis Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it man outside supplies. The part, called WISCO, isa 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 7,800 units of WISCO during the year 2. Variable manufacturing costs applicable to the production of each WISCO were direct materials 55.00, director $4.60, indirect labour $0.45, and its $0.33. 3. Fixed manufacturing costs applicable to the production of WISCO were as follows: Cost Item Depreciation Property taxes Direct $1,990 530 Allocated 865 180 Insurance 910 $3,430 585 $1,630 The company will eliminate all variable manufacturing and directed costs if it purchases WISCO. Allocated costs will have to be absorbed by other production departments 4. The lowest quotation for 7,800 WISCO units from a supplier is $82,600 5. IF WISCO units are purchased, freight and inspection costs would be $0.43 per unit, and the machining department would incur receving costs total 51 275 per ve Prepare an incremental analysis for WISCO (If an amount reduces the net income then enter with a negative sin preceding the number (15,000).) -15.000 or parenthesse. Make Wisco Buy Wisco Net Income Increase (Decrease tudy 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 $3.500 of net income with the facilities currently being used to manufacture WISCO (If an am the net income then enter with a negative sign preceding the number, 2.9.-15,000 or parenthesis, e.g. (15000) Net income will be Net Income Increase (Decrease) Make Wisco Buy Wisco Total annual cost Opportunity cost Total cost SAVE FOR LATER Question Attempts: 1 of 2 used STANDARD VIEW PRIN Purchase price Freight costs Fixed costs bble manufacturing and direct fixed costs if it purchases WISCO. Allocated costs will have to be absorbed by othen sco units from a supplier is $82,600. ght and inspection costs would be $0.43 per unit, and the machining department would incur receiving costs tota Indirect labour Receiving costs ISCO. (If an amount reduces the net income then enter with a negative sign preceding the number, e Direct materials Net Income Increase (Decrease) sco Buy Wisco Direct labour Utilities Total annual cost