Make or Buy A restaurant bakes its own bread for a cost of $156 per unit (100 loaves), including fixed costs of $37 per unit. A proposal is offered to purchase bread from an outside source for $102 per unit, plus $10 per unit for delivery Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Bread (Alt. 1) or Buy Bread (Alt. 2) July 7 Differential Effect Make Bread Buy Bread on Income (Alternative 1) (Alternative 2) (Alternative 2) a 50 $0 $0 Sales price Unit Costs: Purchase price Delivery Variable costs Fixed factory overhead Income (Loss) Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread. 607 P 57F 11/5/22 Replace Equipment A machine with a book value of $249,600 has an estimated six-year life. A proposal is offered to sell the old machine for $214,400 and replace it with a new machine at a cost of $281,800. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $49.100 to $39,300. Prepare a differential analysis dated October 3 on whether to continue with the old machine (Alternative 1) or replace the old machine (Alternative 2). If an amount is zero, enter "o". For those boxes in which you must enter subtracted or negative numbers use a minus sign Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) October 3 Continue with Replace Old Differential Effect Old Machine Machine on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) E Income (Loss) Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2) 609 PA 11/5/20 57"F