M . expenses income (loss) from operations 35,000 $ 81,000 20,000 $ 65,000 $ 25,000 $(17,000) 25,000 $120,000 $ 40,000 80,000 $ 266,000 $ 48,000 EX 25-7 Make-or-buy decision OBJ. 1 Eclipse Computer Company has been purchasing carrying cases to ers at a delivered cost of $65 per unit. The company, which is currently purchasing carrying cases for its portable comput- full capacity, charges factory overhead to production at the rate of 40% cost. The fully absorbed unit costs to produce comparable carrying cases ar co be as follows: produce comparable carrying cases are expected Direct materials $30 Direct labor 10 Factory overhead (40% of direct labor) Total cost per unit $65 If Eclipse Computer Company manufactures the carrying cases, fixed factory overhead Osts will not increase and variable factory overhead costs associated with the cases are xpected to be 15% of the direct labor costs. Prepare a differential analysis, dated July 19, 2014, to determine whether the company should make (Alternative 1) or buy (Alternatiye 2) the carrying case. On the basis of the data presented, would it be advisable to make the carry- ing cases or to continue buying them? Explain. - 25-8 Make-or-buy decision TAG-D) employs five people in its Publication De- OBJ. 1 e Theater Arts Guild of Dallas (TAG-D) employs five people in its neaple lay out pages for pamphlets, brochures, magazines, and other