A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $30 per unit. A proposal is offered to purchase small bottles from an outside source for $95 per unit, plus $8 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount s zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Differential Buy Bottles Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price Freight Variable costs Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $30 per unit. A proposal is offered to purchase small bottles from an outside source for $95 per unit, plus $8 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount s zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Differential Buy Bottles Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price Freight Variable costs Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Make or Buy A restaurant bakes its own bread for a cost of $164 per unit (100 loaves), including fixed costs of $33 per unit. A proposal is offered to purchase bread from an outside source for $105 per unit, plus $8 per unit for delivery. Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Bread (Alt. 1) or Buy Bread (Alt. 2) July 7 Make Bread (Alternative 1) Buy Bread(Alternative 2) Differential Effecton Income (Alternative 2) Sales price $0 $0 $0 Unit Costs: Purchase price $fill in the blank d6e37f091047043_1 $fill in the blank d6e37f091047043_2 $fill in the blank d6e37f091047043_3 Delivery fill in the blank d6e37f091047043_4 fill in the blank d6e37f091047043_5…