Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $89 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 60% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $59 Direct labor 20 Factory overhead (60% of direct labor) 12 Total cost per unit $91 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 10% of the direct labor costs. . Labels Cash flows from investing activities Required: Unit costs a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the Amount Descriptions carrying case. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes Direct labor in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon () will Direct materials automatically appear if required Fixed factory overhead b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the Gain on sale of investments carrying case. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in Income (loss) which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "O". A colon () will Loss on sale of investments automatically appear if required. Purchase price Sales price Variable factory overhead Differential Analysis Make (Alternative 1) or Buy (Alternative 2) Carrying Case September 30 Make Carrying Differential Effect 1 Buy Carrying Case Case on Income 2 (Alternative 1) (Alterative 2) (Alternative 2) 3 4 Label) 5 6 7 8 9 10 b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain. Assuming there were no better alternative uses for the spare capacity, it would Be advisable / Not advisable manufacture the carrying cases because the cost savings would be 58 per unit. Fixed factory overhead is Irrelevant / Relevant it will continue whether the carrying cases are purchased or manufactured