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Diamond Computer Company has been purchasing carrying cases or its portable computers at a purchase price o $59 per unit. The company, which IS current
Diamond Computer Company has been purchasing carrying cases or its portable computers at a purchase price o $59 per unit. The company, which IS current y operating below u capacity, charges factory overhead to production at the rate o 4 % of diect labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials Direct labor Factory overhead (40% of direct labor) 7.20 Total cost per unit If Diamond 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. a Prepare a differential analysis dated February 24 to determine whether the company should make Atemative 1 or buy Alternative 2 the carrying case. If an amount is zero, enter zero 1f required round your answers to two decimal places. For those boxes in which you must enter subtracted or negative numbers use a minus sign. $35.00 18.00 $60.20 Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt 2) February 24 Differential Effect Make Carrying Case (Alternative 1) Case (Alternative 2) Buy Carrying on Costs Sales Price Costs: Purchase price Direct matenias per unit Direct labor per unit Variable factory overhead per unit Fxed factory overhead per unit Total Costs
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