The management of Indigo Manufacturing Company is trying to decide whether to continue manufacturing a part...

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The management of Indigo Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called WISCO, 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, 2022: 1. The machining department produced 7.800 units of WISCO during the year. 2. Variable manufacturing costs applicable to the production of each WISCO unit were direct materials $4.90, direct labour $4.10, indirect labour $0.45, and utilities $0.32. 3. Fixed manufacturing costs applicable to the production of WISCO were as follows: Cost Item Direct Allocated Total Depreciation $1,940 $850 $2,790 Property taxes 530 145 675 Insurance 925 570 1,495 $3,395 $1,565 $4,960 The company will eliminate all variable manufacturing and direct fixed costs if it purchases WISCO. Allocated costs will have to be absorbed by other production departments. So if WISCO is purchased, the fixed manufacturing costs allocated to WISCO will have to be absorbed by other production departments. 4. The lowest quotation for 7,800 WISCO units from a supplier is $76,284. 5. If WISCO units are purchased, freight and inspection costs would be $0.43 per unit, and the machining department would incur receiving costs totalling $1,300 per year. Prepare an incremental analysis for WISCO. (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Number of units: 7,800 Net Income Make Wisco Buy Wisco Increase (Decrease) $ Total annual cost $ $ Based on your analysis, what decision should management make? The company should WISCO Question Part Score --/1 Would the decision be different if Indigo had the opportunity to produce $3,250 of net income with the facilities currently being used to manufacture WISCO? (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, e.g. (15,000).) Net income will be by $ Make Wisco Buy Wisco Total annual cost Opportunity cost Total cost $ $ $ Net Income Increase (Decrease) The management of Indigo Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called WISCO, 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, 2022: 1. The machining department produced 7.800 units of WISCO during the year. 2. Variable manufacturing costs applicable to the production of each WISCO unit were direct materials $4.90, direct labour $4.10, indirect labour $0.45, and utilities $0.32. 3. Fixed manufacturing costs applicable to the production of WISCO were as follows: Cost Item Direct Allocated Total Depreciation $1,940 $850 $2,790 Property taxes 530 145 675 Insurance 925 570 1,495 $3,395 $1,565 $4,960 The company will eliminate all variable manufacturing and direct fixed costs if it purchases WISCO. Allocated costs will have to be absorbed by other production departments. So if WISCO is purchased, the fixed manufacturing costs allocated to WISCO will have to be absorbed by other production departments. 4. The lowest quotation for 7,800 WISCO units from a supplier is $76,284. 5. If WISCO units are purchased, freight and inspection costs would be $0.43 per unit, and the machining department would incur receiving costs totalling $1,300 per year. Prepare an incremental analysis for WISCO. (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, e.g. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Number of units: 7,800 Net Income Make Wisco Buy Wisco Increase (Decrease) $ Total annual cost $ $ Based on your analysis, what decision should management make? The company should WISCO Question Part Score --/1 Would the decision be different if Indigo had the opportunity to produce $3,250 of net income with the facilities currently being used to manufacture WISCO? (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, e.g. (15,000).) Net income will be by $ Make Wisco Buy Wisco Total annual cost Opportunity cost Total cost $ $ $ Net Income Increase (Decrease)