Urrent Attemptin The management of Sheridan 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, 2023 18,000 units of CISCO were produced in the Machining Department. 2 Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $4,60, direct labor $4.19, Indirect labor $0.42, utilities $0.40. 3. Fwed manufacturing costs applicable to the production of CISCO were: Direct $1,900 Allocated $920 Cost Item Depreciation Property taxes Insurance 540 270 630 870 $3,310 $1.820 All variable manufacturing and direct foed costs will be eliminated in CISCO is purchased. Allocated costs will not be eliminated ir CISCO is purchased Solf CISCO is purchased the food 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 577520 5.1 CISCO units are purchased, freight and inspection costs would be $0.34 per unit, and receiving costs totaling 51,300 per year would be incurred by the Machining Department. (a) Prepare an incremental analysis for CISCO.(Enter negative amounts using either a negative sigo preceding the number A5 or parentheses es (45) Make CISCO Net Income Increase Decrease) Buy CISCO Direct material Dwect labor Indirect labor Depreciation Property would be incurred by the maching Departm (a) Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sigo preceding the 45 or parentheses es (15)) Net Income Increase (Decrease) Make CISCO Buy CISCO Direct material $ $ Direct labor Indirect labor Utilities Depreciation Property taxes Insurance Purchase price Freight and inspection Receiving costs Total annual cost $ I $ (b) Based on your analysis. what decision should management make! The company should I Would the decision be different i Sheridan Company has the opportunity to produce $1000 of net income with the facilities currently being used to manufacture CISCO Attempts of 1 used Veronica Mars, a recent graduate of Bel's accounting program, evaluated the operating performance of Sunland Company's divtalons Veronica made the following presentation to Sunland's board of directors and suggested the Percy Division be eliminat "If the Percy Division is eliminated," she said, "our total profits would increase by $26,100' Sales Cost of goods sold Gross profit Operating expenses Net income The Other Flve Divisions $1,664,000 977,900 686,100 528,000 $158,100 Percy Division $100,300 76,300 24,000 50,100 $ 126,100) Total $1,764,300 1,054,200 710.100 578,100 $132,000 In the Percy Division, cost of goods sold is $59,300 variable and $17.000 fixed, and operating expenses are $31,600 variable and $18.500 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sin preceding the number 23.-45 or parentheses cs. (451) Net Income Increase (Decrease) Continue Eliminate $ Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution Fhed costs Cost of goods sold Operating pera Total incorrect cort