The management of lvanhoe Manufacturing Company is trying to decide whather to continue manufacturing a part or to buy it from an outside supplier. The part, callad CISCO, is a component of the company's finishad product.

The following information was collactad from the accounting records and production data for the yaar anding Dacamber $31,2027.$

$1\mathrm{.}8,000$ units of CISCO were produced in the Machining Department

$2.$ Variable manufacturing costs applicable to the production of each CISCO unit ware:

diract matarials $$5\mathrm{.}30,$ direct labor $$4\mathrm{.}25,$ indirect labor $$0\mathrm{.}45,$ utilities $$0\mathrm{.}39.$

$3.$ Fixad manufacturing costs applicable to the production of CISCO were:

$\backslash$table$[[$Cost Item,Direct,Allocated,Total$],[$Depraciation$,$$$2,000,$$$930,$$$2,930],[$Proparty tases,$500,410,910],[|$nsurance$,950,600,1,550],[$$$3,450,$$$1,940,5,390]]$

All variable manufacturing and direct foxad coats will be aliminated if CISCO is purchasad. Allocated costs will not be eliminated if CISCO is purchased So if CISCO is purchased, the fosd manufacturing costs allocated to CISCO will have to be absorbad by athar production departments.

$4.$ The lowest quotation for $8,000$ CISCO units from a supplier is $$83,660.$

$5.$ If CISCO units are purchased, freight and inspection costs would be $$0\mathrm{.}37$ per unit, and raceiving costs totaling $$1,260$ par year would be incurred by the Machining Dapartment.

$($a$)$ Prapara an incremsntal analysis for CISCO. $($Enter negative amounts using either a negative sign preceding the number e$.$g $-45$ or parentheses e$.).)$

$\backslash$table$[[,,$Make CISCO,,Buy CISCO,,$\backslash$table$[[$Net Income$],[$Increase$],[($Decrease$)]]],[$Dirsct matarial,$$,,$$$,,$$$,],[$Diract labor$],[$Indiractlabor$],[$Utilitias$],[$Deprsciation$],[$Proparty taves$],[$Insurance$],[$Purchase price$],[$Fraight and irspaction$],[$Racaiving coats$],[$Total annual cost,$$,,$$$,,$$$,]]$