Make or Buy

A company manufactures various$-$sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $$168$ per unit $(100$ bottles$),$ including fixed costs of $$31$ per unit. A proposal is offered to purchase small bottles from an outside source for $$96$ per unit, plus $$12$ per unit for freight.

a$.$ Prepare a differential analysis dated January $25$ to determine whether the company should make $($Alternative $1)$ or buy $($Alternative $2)$ the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter $"0".$

Differential Analysis

Make Bottles $($Alt$.1)$ or Buy Bottles $($Alt$.2)$

January $25$

$\backslash$table$[[*,\backslash$table$[[$Make$],[$Bottles$],[($Alternative $1)]],\backslash$table$[[$Buy$],[$Bottles$],[($Alternative $2)]],\backslash$table$[[$Differen$],[$Effect$],[($Alternativ$]]],[$Unit costs:,$*,,],[$Purchase price,$$,$$$,$$