Sapphire Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $89 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 total unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $53.00 Direct labor 26.00 Factory overhead (40% of direct labor) 10.40 Total cost per unit $89.40 If Sapphire 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. Question Content Area a. Prepare a differential analysis dated February 24 to determine whether the company should Make Carrying Case (Alternative 1) or Buy Carrying Case (Alternative 2). If an amount is zero, enter "0". If required, round your answers to two decimal places. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)February 24 Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2) Differential Effects (Alternative 2) Unit costs: Purchase price $fill in the blank ab8b88f63faffdb_1 $fill in the blank ab8b88f63faffdb_2 $fill in the blank ab8b88f63faffdb_3 Direct materials per unit fill in the blank ab8b88f63faffdb_4 fill in the blank ab8b88f63faffdb_5 fill in the blank ab8b88f63faffdb_6 Direct labor per unit fill in the blank ab8b88f63faffdb_7 fill in the blank ab8b88f63faffdb_8 fill in the blank ab8b88f63faffdb_9 Variable factory overhead per unit fill in the blank ab8b88f63faffdb_10 fill in the blank ab8b88f63faffdb_11 fill in the blank ab8b88f63faffdb_12 Fixed factory overhead per unit fill in the blank ab8b88f63faffdb_13 fill in the blank ab8b88f63faffdb_14 fill in the blank ab8b88f63faffdb_15 Total unit costs $fill in the blank ab8b88f63faffdb_16 $fill in the blank ab8b88f63faffdb_17 $fill in the blank ab8b88f63faffdb_18 Question Content Area b. Assuming there were no better alternative uses for the spare capacity, it would to manufacture the carrying cases. Fixed factory overhead is

Sapphire Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $89 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 total unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $53.00 Direct labor 26.00 Factory overhead (40% of direct labor) 10.40 Total cost per unit $89.40 If Sapphire 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. Question Content Area a. Prepare a differential analysis dated February 24 to determine whether the company should Make Carrying Case (Alternative 1) or Buy Carrying Case (Alternative 2). If an amount is zero, enter "0". If required, round your answers to two decimal places. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)February 24 Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2) Differential Effects (Alternative 2) Unit costs: Purchase price $fill in the blank ab8b88f63faffdb_1 $fill in the blank ab8b88f63faffdb_2 $fill in the blank ab8b88f63faffdb_3 Direct materials per unit fill in the blank ab8b88f63faffdb_4 fill in the blank ab8b88f63faffdb_5 fill in the blank ab8b88f63faffdb_6 Direct labor per unit fill in the blank ab8b88f63faffdb_7 fill in the blank ab8b88f63faffdb_8 fill in the blank ab8b88f63faffdb_9 Variable factory overhead per unit fill in the blank ab8b88f63faffdb_10 fill in the blank ab8b88f63faffdb_11 fill in the blank ab8b88f63faffdb_12 Fixed factory overhead per unit fill in the blank ab8b88f63faffdb_13 fill in the blank ab8b88f63faffdb_14 fill in the blank ab8b88f63faffdb_15 Total unit costs $fill in the blank ab8b88f63faffdb_16 $fill in the blank ab8b88f63faffdb_17 $fill in the blank ab8b88f63faffdb_18 Question Content Area b. Assuming there were no better alternative uses for the spare capacity, it would to manufacture the carrying cases. Fixed factory overhead is

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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Question Content Area

a. Prepare a differential analysis dated February 24 to determine whether the company should Make Carrying Case (Alternative 1) or Buy Carrying Case (Alternative 2). If an amount is zero, enter "0". If required, round your answers to two decimal places. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)February 24

	Make Carrying Case (Alternative 1)	Buy Carrying Case (Alternative 2)	Differential Effects (Alternative 2)
Unit costs:
Purchase price	$fill in the blank ab8b88f63faffdb_1	$fill in the blank ab8b88f63faffdb_2	$fill in the blank ab8b88f63faffdb_3
Direct materials per unit	fill in the blank ab8b88f63faffdb_4	fill in the blank ab8b88f63faffdb_5	fill in the blank ab8b88f63faffdb_6
Direct labor per unit	fill in the blank ab8b88f63faffdb_7	fill in the blank ab8b88f63faffdb_8	fill in the blank ab8b88f63faffdb_9
Variable factory overhead per unit	fill in the blank ab8b88f63faffdb_10	fill in the blank ab8b88f63faffdb_11	fill in the blank ab8b88f63faffdb_12
Fixed factory overhead per unit	fill in the blank ab8b88f63faffdb_13	fill in the blank ab8b88f63faffdb_14	fill in the blank ab8b88f63faffdb_15
Total unit costs	$fill in the blank ab8b88f63faffdb_16	$fill in the blank ab8b88f63faffdb_17	$fill in the blank ab8b88f63faffdb_18