Make or Buy

A company manufactures various$-$sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $$148$ per unit $(100$ bottles$),$ including fixed costs of $$30$ per unit. A proposal is offered to purchase small bottles from an outside source for $$97$ per unit, plus $$12$ per unit for freight.

Question Content Area

a$.$ Prepare a differential analysis dated February $18$ 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 $"0".$