Make or Buy

A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $67 per unit (100 bottles), including fixed costs of $22 per unit. A proposal is offered to purchase small bottles from an outside source for $35 per unit, plus $5 per unit for freight.

Prepare a differential analysis dated March 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) March 30

	Make Bottles (Alternative 1)	Buy Bottles (Alternative 2)	Differential Effect on Income (Alternative 2)
Sales price	$0	$0	$0
Unit Costs:
Purchase price	$fill in the blank ade085faf03ef8a_1	$fill in the blank ade085faf03ef8a_2	$fill in the blank ade085faf03ef8a_3
Delivery	fill in the blank ade085faf03ef8a_4	fill in the blank ade085faf03ef8a_5	fill in the blank ade085faf03ef8a_6
Variable costs	fill in the blank ade085faf03ef8a_7	fill in the blank ade085faf03ef8a_8	fill in the blank ade085faf03ef8a_9
Fixed factory overhead	fill in the blank ade085faf03ef8a_10	fill in the blank ade085faf03ef8a_11	fill in the blank ade085faf03ef8a_12
Income (Loss)	$fill in the blank ade085faf03ef8a_13	$fill in the blank ade085faf03ef8a_14	$fill in the blank ade085faf03ef8a_15