Make or Buy A company manufactures various sized plastic bottles for its medicinal product. The manufacturing...
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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 cost 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 Buy Bottles (Alternative 1) (Alternative 2) Differential Effect on Income (Alternative 2) $0 Sales price Unit Costs: Purchase price Delivery Variable costs Fixed factory overhead Income (Loss) $0 $0 Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles. 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 cost 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 Buy Bottles (Alternative 1) (Alternative 2) Differential Effect on Income (Alternative 2) $0 Sales price Unit Costs: Purchase price Delivery Variable costs Fixed factory overhead Income (Loss) $0 $0 Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.
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