View Policies Current Attempt in Progress The management of Ivanhos Manufacturing Companys trying to decide whether to continue manufacturing a sartor to buy it from an outside supplier. The part, called CISCO, is a component of the company's inished product. The following information was collected from the accounting records and production data for the year andira December 31, 2022. 1.8.000 units of CISCO were produced in the Machining Department 2. Variable manufacturing costs applicable to the production of each CISCO unit wers: direct materials S5.30, direct labor $425, indirect labor $0.45, utilities S 0.38. 2. Fixed manufacturing costs applicable to the production of CISCO were: Direct Allocated Total Cost Item Depreciation S 2.000 S 930 S2.930 Property taxes 500 410 910 Insurance 950 600 1.550 $ 3.450 $ 1.940 5.390 All variable manufacturing and direct fixed costs will be sliminated if CISCO is purchased. Allocated costs will not be eliminated if CISCO is purchased So if CISCO is purchased the forced manufacturing costs allocated to CISCO vill have to be absorbed by other production departments. 4. The lowest cuotation for 8.000 CISCO units from a supplier is $83.660. 5.1FCISCO units are purchased, freight and inspection costs would be 0.37 par unit and receiving casts totalins $1.250 per year would be incurred by the Machining Department Cal Prepare an incremental analysis for CISCO. Enter negative amounts using either a negative sign preceding the number e3-45 er parentheses cg (451) Net Income Increase Decrease) Make CISCO Buy CISCO Direct material S Direct labor Indirect abor Utilities Depreciation Property taxes Insurancs Purchase price Freight and inspection Receiving costs Total anual cost (b) Based on your analysis, what decision should management make? The company should Tel Would the decision be different if Ivanhos Company has the opportunity to produce $3,000 of net income with the facilities currently being used to manufacture CISCO? Textbook and