Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $62 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 43% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

Direct materials	$24
Direct labor	16
Factory overhead (43% of direct labor)	6.88
Total cost per unit	$46.88

If Fremont 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 13% of the direct labor costs.

a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Use a minus sign to indicate a loss.

a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Use a minus sign to indicate a loss.

Differential Analysis
Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)
September 30
	Make Carrying Case (Alternative 1)	Buy Carrying Case (Alternative 2)	Differential Effect on Income (Alternative 2)
Sales price	$fill in the blank 57c7d001f05ef98_1	$fill in the blank 57c7d001f05ef98_2	$fill in the blank 57c7d001f05ef98_3
Unit costs:
Purchase price	fill in the blank 57c7d001f05ef98_4	fill in the blank 57c7d001f05ef98_5	fill in the blank 57c7d001f05ef98_6
Direct materials	fill in the blank 57c7d001f05ef98_7	fill in the blank 57c7d001f05ef98_8	fill in the blank 57c7d001f05ef98_9
Direct labor	fill in the blank 57c7d001f05ef98_10	fill in the blank 57c7d001f05ef98_11	fill in the blank 57c7d001f05ef98_12
Variable factory overhead	fill in the blank 57c7d001f05ef98_13	fill in the blank 57c7d001f05ef98_14	fill in the blank 57c7d001f05ef98_15
Fixed factory overhead	fill in the blank 57c7d001f05ef98_16	fill in the blank 57c7d001f05ef98_17	fill in the blank 57c7d001f05ef98_18
Income (Loss)	$fill in the blank 57c7d001f05ef98_19	$fill in the blank 57c7d001f05ef98_20	$fill in the blank 57c7d001f05ef98_21

b. Assuming there were no better alternative uses for the spare capacity, it would to manufacture the carrying cases. Fixed factory overhead is to this decision.