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Make or Buy Decision Exercise: City Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, City Company has the opportunity to use the factory equipment to produce another product which is estimated to have operating income of $22,000. Instructions Prepare an incremental analysis report for City Company which can serve as informational input into this make or buy decision. Sell or Process Further Exercise: Chen Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Larco, Marco, and Narco. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $180,000 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Instructions Determine whether each of the three joint products should be sold as is or processed further