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Asbtar Company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is SAR 65 per unit (100 bottles), including fixed
Asbtar Company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is SAR 65 per unit (100 bottles), including fixed costs of SAR 14 per unit. A proposal is offered to purchase small bottles from an outside source for SAR 42 per unit, plus SAR 3 per unit for freight. Prepare a differential analysis to determine whether the company should make (Alternative 1) or buy (Alternative 2) for bottles, assuming fixed costs are not affected by the decision.
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