The management of Pina 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. 7,900 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 $4.51, indirect labor $0.45, utilities $0.41. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Direct Allocated Depreciation $1,900 $860 Property taxes 530 320 Insurance 870 610 $3,300 $1,790 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 7,900 CISCO units from a supplier is $78,853. 5. If CISCO units are purchased, freight and inspection costs would be $0.38 per unit, and receiving costs totaling $1,250 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 Increase Make CISCO Buy CISCO (Decrease) Direct material S136182 $136182 Direct labor 135629 135629 Indirect labor T3555 13555 Utilities 13239) T3239 A-E-EP Depreciation | 1,900 T1900 Property taxes 530 1530 Insurance X 1870 0 1870 178853 78853) Purchase price Freight and inspection Receiving costs T3002 T3002) T(1260) T1260 Total annual cost 81,905 83,115 Sl(1210) Your answer is correct. Based on your analysis, what decision should management make? The company should make CISCO Your answer is correct. Would the decision be different if Pina Company has the opportunity to produce $3,000 of net income with the facilities currently being used to manufacture CISCO? Yes