Direct materials $24 Direct labor 19 Factory overhead (36% of direct labor) 6.84 Total cost per unit $49.84 - If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 13% of the direct labor costs. a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Unit costs: Purchase price Direct materials Direct labor Variable factory overhead Fixed factory overhead is been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 36% of direct labor cost. The unit costs to es are expected to be as follows: Total unit costs Feedback Make Carrying Buy Carrying Case Differential Case Effects (Alternative 1) (Alternative 2) (Alternative 2) çoooogl X X -61 Incorrect 24 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.
Direct materials $24 Direct labor 19 Factory overhead (36% of direct labor) 6.84 Total cost per unit $49.84 - If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 13% of the direct labor costs. a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Unit costs: Purchase price Direct materials Direct labor Variable factory overhead Fixed factory overhead is been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 36% of direct labor cost. The unit costs to es are expected to be as follows: Total unit costs Feedback Make Carrying Buy Carrying Case Differential Case Effects (Alternative 1) (Alternative 2) (Alternative 2) çoooogl X X -61 Incorrect 24 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Chapter 11 Homework (Applicati x
Chapter 11 Homework (Application)
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Maps
Chapter 11 Homework (Application)
Unit costs:
Purchase price
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
Total unit costs
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Direct materials
Direct labor
Factory overhead (36% of direct labor)
Total cost per unit
If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 13% of the direct labor costs.
Feedback
Dashboard
a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0".
Differential Analysis
Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)
April 30
Check My Work
Assignment Score: 17.5%
as been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 36% of direct labor cost. The unit costs to
es are expected to be as follows:
eBook
$
$24
19
6.84
$49.84
Make
Carrying
Buy
Carrying
Case
Case
(Alternative 1) (Alternative 2)
0 ✓
✓
✓
X
X
24
19
-61
✓
0 ✓
0
Incorrect
Differential
Effects
(Alternative 2)
-61
24
Show Me How
19
✓
✓ 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
to manufacture the carrying cases. Fixed factory overhead is
All work saved.
to this decision.
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