Please do not give solution in image format thanku Make-or-Buy DecisionSomerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $59 per unit. The company,which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The unit costs toproduce comparable carrying cases are expected to be as follows:Direct materialsDirect laborFactory overhead (40% of direct labor)Total cost per unitIf Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costsassociated with the cases are expected to be 15% of the direct labor costs.Unit costs:a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carryingcase. If required, round your answers to two decimal places. If an amount is zero, enter "0".Purchase priceDirect materialsDirect labor$2518Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)April 307.2MakeCarryingCaseUnit costs:$50.2Purchase priceDirect materialsDirect laborVariable factory overheadFixed factory overheadTotal unit costsBuyCarryingCaseFactory overhead (40% of direct labor)Total cost per unitIf Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costsassociated with the cases are expected to be 15% of the direct labor costs.DifferentialEffects(Alternative 1) (Alternative 2) (Alternative 2)887.2a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carryingcase. If required, round your answers to two decimal places. If an amount is zero, enter "0".$50.2Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)April 30MakeCarryingCaseDifferentialEffects(Alternative 1) (Alternative 2) (Alternative 2)BuyCarryingCaseb. Assuming there were no better alternative uses for the spare capacity, it wouldfactory overhead isto this decision.to manufacture the carrying cases. Fixed

Make or buy is the decision-making analysis that helps the entity to decide if a particular product…

Make-or-Buy Decision Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $59 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials Direct labor Factory overhead (40% 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 15% 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". Unit costs: Purchase price Direct materials Direct labor $25 18 Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Cale (Alt. 2) April 30 7.2 $50.2 Make Carrying Case Unit costs: Purchase price Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit costs Buy Carrying Case Factory overhead (40% 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 15% of the direct labor costs. Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) 888 7.2 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". $50.2 Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Make Carrying Case Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) Buy Carrying Case b. Assuming there were no better alternative uses for the spare capacity, it would factory overhead is to this decision. to manufacture the carrying cases. Fixed