2. Make or buy

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 $31 per unit. A proposal is offered to purchase small bottles from an outside source for $98 per unit, plus 512 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, enter0 Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Unit cost Purchase price Freight Variable costs Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles Buy the bottles Make the bottles