A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles

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A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $46 per unit (100 bottles), including fixed costs of $14 per unit. A proposal is offered to purchase small bottles from an outside source for $30 per unit, plus $6 per unit for freight. Prepare a differential analysis dated March 30, 2012, to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

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Financial and Managerial Accounting Using Excel for Success

ISBN: 978-1111993979

1st edition

Authors: James Reeve, Carl S. Warren, Jonathan Duchac

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