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The management of Crane 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 Crane 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, 2020 1.8,000 units of CISCO 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 $4.88, indirect labor $0.45, utilities $0.44 3. Fixed manufacturing costs applicable to the production of CISCO were: Direct $1.900 Allocated $920 Cost Item Depreciation Property taxes Insurance 490 420 890 $3.280 620 $1.960 All variable manufacturing and direct fixed costs will be eliminated IFCISCO is purchased Allocated costs will not be eliminated it 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 8.000 CISCO units from a supplier is $87.390 S. CISCO units are purchased freight and inspection costs would be $0.34 per unit and receiving costs totaling $1,310 per year would be incurred by the Machining Department (a) Prepare an incremental analysis for CISCO.(Enter negative amounts using either a negative sin preceding the number es 45 or parenthesese..(451) Net Income Increase (Decrease Make CISCO $ Buy CISCO 5 Direct materi Direct labor Indirect labor Depreciation Property the Insurance Purchase price Freight and Inspection Receiving costs Total al cost $ ( based on your analysis what decision should management make The company should (cWould the decision before it Crane Company has the opportunity to produce $3,000 of net income with the facilities currently being used to manufacture CISCO

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