Make or Buy

A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $30 per unit (1,000 bottles), including fixed costs of $14 per unit. A proposal is offered to purchase small bottles from an outside source for $20 per unit, plus $1 per unit for freight.

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". Feedback Theck My Work b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles