a. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. Round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make (Alt. 1) or Buy (Alt. 2) Carrying Case May 31 Make Carrying Case Buy Carrying Case Differential Effects Line Item Description (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price 0 55.20 X 55.20 Direct materials 27.00 0 27.00 Direct labor 20.00 0 20.00 Variable factory overhead 2.60 0 2.60 Fixed factory overhead 5.60 5.60 0 Total unit costs 55.2 60.80 X 104.80 Feedback ▼Check My Work a. For the make and buy alternatives provide the unit costs. Use percentage to separate variable and fixed costs. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2. b. Assuming there were no better alternative uses for the spare capacity, it would be advisable overhead is irrelevant to this decision. to manufacture the carrying cases. Fixed factory

a. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. Round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make (Alt. 1) or Buy (Alt. 2) Carrying Case May 31 Make Carrying Case Buy Carrying Case Differential Effects Line Item Description (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price 0 55.20 X 55.20 Direct materials 27.00 0 27.00 Direct labor 20.00 0 20.00 Variable factory overhead 2.60 0 2.60 Fixed factory overhead 5.60 5.60 0 Total unit costs 55.2 60.80 X 104.80 Feedback ▼Check My Work a. For the make and buy alternatives provide the unit costs. Use percentage to separate variable and fixed costs. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2. b. Assuming there were no better alternative uses for the spare capacity, it would be advisable overhead is irrelevant to this decision. to manufacture the carrying cases. Fixed factory

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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answer both parts correctly
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