The management of Shatner 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. 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 $4.57, direct labor $4.22, indirect labor $0.46, utilities $0.43. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Direct Allocated Depreciation $2,100 $910 Property taxes 560 370 Insurance 910 580 $3,570 $1,860 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 7,900 CISCO units from a supplier is $77,160. 5. If CISCO units are purchased, freight and inspection costs would be $0.38 per unit, and receiving costs totaling $1,270 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 direct material in dollars $enter direct material in dollars $enter direct material in dollars Direct labor enter direct labor in dollars enter direct labor in dollars enter direct labor in dollars Indirect labor enter indirect labor in dollars enter indirect labor in dollars enter indirect labor in dollars Utilities enter utilities in dollars enter utilities in dollars enter utilities in dollars Depreciation enter depreciation in dollars enter depreciation in dollars enter depreciation in dollars Property taxes enter property taxes in dollars enter property taxes in dollars enter property taxes in dollars Insurance enter insurance in dollars enter insurance in dollars enter insurance in dollars Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars Freight and inspection enter freight and inspection in dollars enter freight and inspection in dollars enter freight and inspection in dollars Receiving costs enter receiving costs in dollars enter receiving costs in dollars enter receiving costs in dollars Total annual cost $enter total annual cost in dollars $enter total annual cost in dollars $enter total annual cost in dollars (b) Based on your analysis, what decision should management make? The company should select between make and buy. (c) Would the decision be different if Shatner 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

Current Attempt in Progress The management of Shatner 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. 1.7,900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $4.57, direct labor $4.22, indirect labor $0.46, utilities $0.43. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Direct Allocated $2.100 $910 Depreciation Property 560 370 taxes 910 580 Insurance $3,570 $1,860 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 7,900 CISCO units from a supplier is $77,160. 5. If CISCO units are purchased, freight and inspection costs would be $0.38 per unit, and receiving costs totaling $1,270 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).) 11:01 PM