The management of Monty 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 $4.58, direct labor $4.50, indirect labor $0.48, utilities $0.44. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Depreciation Property taxes Insurance Direct $1,900 Allocated $930 530 440 920 $3,350 620 $1,990 All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will have to be absorbed by other production departments. 4. The lowest quotation for 8,100 CISCO units from a supplier is $81,505. 5. If CISCO units are purchased, freight and inspection costs would be $0.35 per unit, and receiving costs totaling $1,260 per year would be incurred by the Machining Department. Your answer is partially correct. Try again. Prepare an incremental analysis for CISCO. (If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Direct material Make CISCO Buy CISCO 37098 Direct labor 36450 Indirect labor 3888 Utilities Depreciation Increase (Decrease) 37098 36450 3888 3564 3564 1900 1900 Property taxes 530 Insurance 920 530 920 Purchase price Freight and inspection Receiving costs 81505 -81505 2835 -2835 1260 -1260 Total annual cost 84250 85600 -1250