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seee photos The management of Carla Vista Manufacturing Company is trying, to decide whether to continue manufacturing a part or to buyit from an outside
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The management of Carla Vista Manufacturing Company is trying, to decide whether to continue manufacturing a part or to buyit from an outside supplier. The part, called CISCO, is a component of the companys finished product. The following information was collected from the accounting records and production data for the year ending December 31,2022. 1. 8,100 units of C1SCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CisCO unit were: direct materials $5.10, direct labor $4,89, indirect labor $0.42, utilities $0.35. 3. Fixed manufacturing costs applicable to the production of CISCO were: All variable manufacturing and direct fixed costs will be eliminated if CisCO is purchased. Allocated costs will not be eliminated if All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will not be el CISCO is purchased. So if CISCO is purchased, the fixed manufacturing costs allocated to CISCO will have to be absorb production departments. 4. The lowest quotation for 8,100CISCO units from a supplier is $87,328. 5. If CISCO units are purchased, freight and inspection costs would be $0.38 per unit, and receiving costs totaling $1,29 would be incurred by the Machining Department. (a) Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sign preceding the 45 or parentheses e.8. (45).) (b) Based on your analysis, what decision should management make? (b) Based on your analysis, what decision should management make? The company should (c) Would the decision be different if Carla Vista Company has the opportunity to produce $3,000 of net income with the facilitics currently being used to manufacture CISCO Step by Step Solution
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