Problem V: Make or Buy Decision (18 points) The management of Nick Corporation is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called HULA 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. 1.5,000 units of HULA were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each HULA unit were: direct materials $4.65, direct labor $4.35, indirect labor $0.50, utilities $0.40. 3. Fixed manufacturing costs applicable to the production of HULA were: Cost Item Direct Allocated Depreciation $1,200 $ 800 Property taxes 600 300 Insurance 1,100 600 $2,900 $1,700 All variable manufacturing and direct fixed costs will be eliminated if HULA is purchased. Allocated costs will have to be absorbed by other production departments. 4. The lowest quotation for 5,000 HULA units from a supplier is $59,000. 5. If HULA units are purchased, freight and inspection costs would be $0.40 per unit, and receiving costs totaling $550 per year would be incurred by the Machining Department. Instructions a. Prepare an incremental analysis for HULA. Your analysis should have columns for (1) Make HULA, (2) Buy HULA, and (3) Net Income Increase/(Decrease). b. Based on your analysis, what decision should management make? c. Would the decision be different if Nick Corporation has the opportunity to produce $40,000 of net income with the facilities currently being used to manufacture HULA? Show computations. d. What non-financial factors should management consider in making its decision