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I'm having a hard time with the labels and description and what row it goes in. Please use the labels and description table for the
I'm having a hard time with the labels and description and what row it goes in. Please use the labels and description table for the correct wording please.
Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $84 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 50% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:
Direct materials | $56 |
Direct labor | 20 |
Factory overhead (50% of direct labor) | 10 |
Total cost per unit | $86 |
Make-or-buy decision Instructions Labels and Amount Descriptions Differential Analysis Final Question Instructions Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $84 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 50% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials S56 Direct labor 20 Factory overhead (50% of direct labor) 10 Total cost per unit S86 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. Required: a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the 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 which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0" A colon (1) will automatically appear if required. b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain. Labels and Amount Descriptions Labels Cash flows from investing activities Unit costs Amount Descriptions Direct labor Direct materials Fixed factory overhead Gain on sale of investments Income (loss) Loss on sale of investments Purchase price Sales price Variable factory overhead Differential Analysis a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the 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 which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0" A colon () will automatically appear if required. Differential Analysis Make (Alternative 1) or Buy (Alternative 2) Carrying Case September 30 Differential Effect Make Carrying Case Buy Carrying Case on Income (Alternative 1) (Alternative 2) (Alternative 2) $84.00 3 Purchase price $0.00 $(84.00) 4 Sales price Direct materials $56.00 $56.00 Direct labor 18.00 18.00 Variable factory overhead 8 Fixed factory overhead 10 Income (Loss) Final Question b. On the basis of the data presented would it be advisable to make the carrying cases or to continue buying them? Explain to manufacture the carrying cases because the cost savings would be $6 per unit. Fixed factory overhead is because it will continue whether Assuming there were no better alternative uses for the spare capacity, it would the carrying cases are purchased or manufactured. be advisable not be advisable Final Question b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them? Explain to manufacture the carrying cases because the cost savings would be $6 per unit. Fixed factory overhead is because it will continue whether Assuming there were no better alternative uses for the spare capacity, it would the carrying cases are purchased or manufactured. irrelevant relevant
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