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Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $40, which includes fixed costs of
Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $40, which includes fixed costs of $12 per unit. An outside provider of this component has offered to sell Lockrite the component for $31. Provide a differential analysis of the outside purchase proposal. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use minus sign. Differential Analysis Make Component (Alternative 1) or Buy Component (Alternative 2) Make Buy Differential Component Component Effects (Alternative 1) (Alternative 2) (Alternative 2) Unit costs: Purchase price Variable costs Fixed costs Total unit costs
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