Question 3 of 6 < > -/13 E The management of Bramble 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, 2022: 1. The machining department produced 8,200 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 $4.20, indirect labour $0.45, and utilities $0.33. 3. Fixed manufacturing costs applicable to the production of WISCO were as follows: Cost Item Direct Allocated Total Depreciation $1,990 $850. $2,840 Property taxes 525 170 695 Insurance 945 600 1,545 $3,460 $1,620 $5,080 The company will eliminate all variable manufacturing and direct fixed costs if it purchases WISCO. Allocated costs will have to be absorbed by other production departments. So if WISCO is purchased, the fixed manufacturing costs allocated to WISCO will have to be absorbed by other production departments. 4. The lowest quotation for 8,200 WISCO units from a supplier is $81,590. 5. If WISCO units are purchased, freight and inspection costs would be $0.44 per unit, and the machining department would incur receiving costs totalling $1,285 per year. Prepare an incremental analysis for WISCO. (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Number of units: 8.200 Buy Wisco Net Income Increase (Decrease) when solving this problem.) Number of units: 8,200 Direct materials Direct labour Indirect labour Utilities Fixed costs Purchase price Freight costs > < +A Make Wisco I 40180 3444 3690 2706 Buy Wisco $ Net Income Increase (Decrease) 40180 3444 3690 2706 5080 1620 3460 0 81590 -81590 0 3608 3608 Question Part Score Based on your analysis, what decision should management make? The company should make WISCO. Question Part Score Would the decision be different if Bramble had the opportunity to produce $2,850 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).) No Net income will be lower by $ 30153 purerneness, No .Net income will be lower by $ 30153 Buy Wisco 55100 $ Make Wisco Total annual cost $ Opportunity cost Total cost $ LA 2850 Net Income Increase (Decrease) 88103 $ (33003) 2850 57950 $ 88103 $ -30153