Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $43, which includes fixed costs of $12 per unit. An outside provider of this component has offered to sell Lockrite the component for $35. Provide a differential analysis of the outside purchase proposal. 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 Component (Alternative 1) or Buy Component (Alternative 2) Make Buy Differential Component Component Effects (Alternative 1) (Alternative 2) (Alternative 2)
Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $43, which includes fixed costs of $12 per unit. An outside provider of this component has offered to sell Lockrite the component for $35. Provide a differential analysis of the outside purchase proposal. 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 Component (Alternative 1) or Buy Component (Alternative 2) Make Buy Differential Component Component Effects (Alternative 1) (Alternative 2) (Alternative 2)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $43,
which includes fixed costs of $12 per unit. An outside provider of this component has offered to sell Lockrite the component for $35.
Provide a differential analysis of the outside purchase proposal. 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 Component (Alternative 1) or Buy Component (Alternative 2)
Make
Buy
Differential
Component
Component
Effects
(Alternative 1)
(Alternative 2)
(Alternative 2)
Unit costs:
Purchase price
Variable costs
Fixed costs
Total unit costs
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