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 $8,000$CISCO units from a supplier is $$80,000.$

$5.$ If CISCO units are purchased, freight and inspection costs would be $$0\mathrm{.}35$ per unit, and receiving costs totaling $$1,300$ 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$.(45).)$

$\backslash$table$[[,,$Make CISCO,,Buy CISCO,,$\backslash$table$[[$Net Income$],[$Increase$],[($Decrease$)]]],[$Direct material,$=$$$,,$$$,,$$$,],[$Direct labor,,,,,,$],[$Indirect labor,,,,,,$],[$Utilities$,,,,,,],[$Depreciation$,,,,,,]]$