b$.$ Determine whether the company should make $($Alternative $1)$ or buy $($Alternative $2)$ the bottles.Make or Buy

A company manufactures various$-$sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $$168$ per unit $(100$ bottles$),$

including fixed costs of $$36$ per unit. A proposal is offered to purchase small bottles from an outside source for $$98$ per unit, plus $$12$ 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, enter $"0".$

Differential Analysis

Make Bottles $($Alt$.1)$ or Buy Bottles $($Alt$.2)$

January $25$

Make

Bottles

$($Alternative $1)($Alternative $2)($Alternative $2)$

Unit costs:

Purchase price

Freight

Variable costs

Fixed factory overhead

Total unit costs

Buy

Bottles

Differential

Effect

b$.$ Determine whether the company should make $($Alternative $1)$ or buy $($Alternative $2)$ the bottles.