Question
Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $75 per unit (100 bottles),
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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 $75 per unit (100 bottles), including fixed costs of $28 per unit. A proposal is offered to purchase small bottles from an outside source for $40 per unit, plus $4 per unit for freight.
Question Content Area
a. Prepare a differential analysis dated July 31 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". Use a minus sign to indicate a loss.
Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) July 31 Make Bottles (Alternative 1) Buy Bottles (Alternative 2) Differential Effect on Income (Alternative 2) Sales price $fill in the blank 780de3f78fe8060_1 $fill in the blank 780de3f78fe8060_2 $fill in the blank 780de3f78fe8060_3 Unit costs: Purchase price $fill in the blank 780de3f78fe8060_4 $fill in the blank 780de3f78fe8060_5 $fill in the blank 780de3f78fe8060_6 Freight fill in the blank 780de3f78fe8060_7 fill in the blank 780de3f78fe8060_8 fill in the blank 780de3f78fe8060_9 Variable costs fill in the blank 780de3f78fe8060_10 fill in the blank 780de3f78fe8060_11 fill in the blank 780de3f78fe8060_12 Fixed factory overhead fill in the blank 780de3f78fe8060_13 fill in the blank 780de3f78fe8060_14 fill in the blank 780de3f78fe8060_15 Income (Loss) $fill in the blank 780de3f78fe8060_16 $fill in the blank 780de3f78fe8060_17 $fill in the blank 780de3f78fe8060_18 Question Content Area
b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.Make the bottlesBuy the bottles
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