Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $156 per unit (100 bottles), including fixed costs of $35 per unit. A proposal is offered to purchase small bottles from an outside source for $104 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 is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Bottles (Alternative 1) Buy Bottles (Alternative 2) Differential Effect (Alternative 2) Unit costs: Purchase price $fill in the blank 54430b055ff4071_1 $fill in the blank 54430b055ff4071_2 $fill in the blank 54430b055ff4071_3 Freight fill in the blank 54430b055ff4071_4 fill in the blank 54430b055ff4071_5 fill in the blank 54430b055ff4071_6 Variable costs fill in the blank 54430b055ff4071_7 fill in the blank 54430b055ff4071_8 fill in the blank 54430b055ff4071_9 Fixed factory overhead fill in the blank 54430b055ff4071_10 fill in the blank 54430b055ff4071_11 fill in the blank 54430b055ff4071_12 Total unit costs $fill in the blank 54430b055ff4071_13 $fill in the blank 54430b055ff4071_14 $fill in the blank 54430b055ff4071_15 b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.
Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $156 per unit (100 bottles), including fixed costs of $35 per unit. A proposal is offered to purchase small bottles from an outside source for $104 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 is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Bottles (Alternative 1) Buy Bottles (Alternative 2) Differential Effect (Alternative 2) Unit costs: Purchase price $fill in the blank 54430b055ff4071_1 $fill in the blank 54430b055ff4071_2 $fill in the blank 54430b055ff4071_3 Freight fill in the blank 54430b055ff4071_4 fill in the blank 54430b055ff4071_5 fill in the blank 54430b055ff4071_6 Variable costs fill in the blank 54430b055ff4071_7 fill in the blank 54430b055ff4071_8 fill in the blank 54430b055ff4071_9 Fixed factory overhead fill in the blank 54430b055ff4071_10 fill in the blank 54430b055ff4071_11 fill in the blank 54430b055ff4071_12 Total unit costs $fill in the blank 54430b055ff4071_13 $fill in the blank 54430b055ff4071_14 $fill in the blank 54430b055ff4071_15 b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
-
Make or Buy
A company manufactures various-sized plastic bottles for its medicinal product. The
manufacturing cost for small bottles is $156 per unit (100 bottles), including fixed costs of $35 per unit. A proposal is offered to purchase small bottles from an outside source for $104 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 is zero, enter "0".
Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make
Bottles
(Alternative 1)Buy
Bottles
(Alternative 2)Differential
Effect
(Alternative 2)Unit costs: Purchase price $fill in the blank 54430b055ff4071_1 $fill in the blank 54430b055ff4071_2 $fill in the blank 54430b055ff4071_3 Freight fill in the blank 54430b055ff4071_4 fill in the blank 54430b055ff4071_5 fill in the blank 54430b055ff4071_6 Variable costs fill in the blank 54430b055ff4071_7 fill in the blank 54430b055ff4071_8 fill in the blank 54430b055ff4071_9 Fixed factory overhead fill in the blank 54430b055ff4071_10 fill in the blank 54430b055ff4071_11 fill in the blank 54430b055ff4071_12 Total unit costs $fill in the blank 54430b055ff4071_13 $fill in the blank 54430b055ff4071_14 $fill in the blank 54430b055ff4071_15 b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education