The management of Blossom 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 companys finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2020. 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, utilities $0.38. 3. Fixed manufacturing costs applicable to the production of CISCO 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 if CISCO is purchased. Allocated costs will not be eliminated if CISCO is purchased. So if CISCO is purchased, the fixed manufacturing costs allocated to CISCO will have to be absorbed by other production departments. 4. The lowest quotation for 8,100 CISCO units from a supplier is $82,656. 5. If CISCO units are purchased, freight and inspection costs would be $0.36 per unit, and receiving costs totaling $1,260 per year would be incurred by the Machining Department. (a) Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Make CISCO		Buy CISCO		Net Income Increase (Decrease)
Direct material		$enter a dollar amount		$enter a dollar amount		$enter the difference between the two previous amounts in the row
Direct labor		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Indirect labor		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Utilities		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Depreciation		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Property taxes		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Insurance		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Purchase price		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Freight and inspection		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Receiving costs		enter a dollar amount		enter a dollar amount		enter the difference between the two previous amounts in the row
Total annual cost		$enter a total amount		$enter a total amount		$enter a total amount

(b) Based on your analysis, what decision should management make?

The company should select whether the company should make or buy CISCO make CISCObuy CISCO.

(c) Would the decision be different if Blossom Company has the opportunity to produce $3,000 of net income with the facilities currently being used to manufacture CISCO? select between yes and no NoYes