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The management of Ayayai Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The

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The management of Ayayai Manufacturing Company is trying to decide whether to continue manufacturing a part or 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 ending December 31, 2017 1. 8,100 units of cisCO were produced in the Machining Department 2. Variable manufacturing costs applicable to the production of each CISCO unit were direct materials $4.86, direct labor $4.40, indirect labor $0.48, utbilities $0.38 3. Fixed manufacturing costs applicable to the production of CISC0 were Cost Item Direct Allocated Depreciation $2.000 940 Property taxes 550 450 Insurance 960 620 $3.510 %2.010 All variable manufacturing and direct fixed costs will be eliminated asco is purchased. Allocated costs wil have to be absorbed by other production departments. The lowest quotation for 8.100 CISCO units from a supplier is $82.656 s. If CISCO units are purchased. freight and inspection costs would be s0.36 per snit, and receiving costs totaling $1.260 per year would be incurred by the Machining Department prepare an incremental analysis for CISCO If amount decreases net income then enter the amount using either o negative sign peceding the number eg.-45 or CALCULATOR PRINTER VERSION 4BACK negative sign preceding the number e.g.-45 or Prepare an incremental analysis for CISCO. (If amount decreases net income then enter the amount using either a parentheses e.g. (45).) Net Income Increase Make CISCo Buy CISCO (Decrease Direct material Direct labor Indirect labor Utilities Property taxes Purchase price Freight and inspection Raceiving costs Total annual costs

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