Make or Buy A restaurant bakes its own bread for a cost of $148 per unit (100 loaves), including fixed costs of $37 per unit. A proposal is offered to purchase bread from an outside source for $100 per unit, plus $9 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 "0". 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) Sales price $0 $0 $0 Unit Costs: Purchase price 0 10,000 X $ -10,000 X Delivery 0 900 -900 X X X > Variable costs 11,100 X o 11,100 Fixed factory overhead 3,700 X 3,700 X 0 Income (Loss) 14,800 X 14,600 200 X Replace Equipment A machine with a book value of $249,300 has an estimated six-year life. A proposal is offered to sell the old machine for $216,800 and replace it with a new machine at a cost of $280,500. The new machine has a six-year life with no residual value. The new machine would reduce annual direct labor costs from $50,900 to $40,700. 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 "0". 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 Old Machine (Alternative 1) Replace old Machine (Alternative 2) Differential Effect on Income (Alternative 2) Revenues: Proceeds from sale of old machine Costs: Purchase price Direct labor (6 years) Old DOO Income (Loss) Should the company continue with the old machine (Alternative 1) or replace the old machine (Alternative 2)? Continue with the old machine Replace the old machine Process or Sell Product T is produced for $3.38 per pound. Product T can be sold without additional processing for $4.01 per pound or processed further into Product U at an additional cost of $0.47 per pound. Product U can be sold for $4.44 per pound. Prepare a differential analysis dated November 15 on whether to sell T (Alternative 1) or process further into U (Alternative 2). If required, round your answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Product T (Alt. 1) or Process Further into Product U (Alt. 2) November 15 Process Further Differential Effect Sell Product T into Product (Alternative 1) on Income U (Alternative 2) (Alternative 2) Revenues, per unit 4.01 4.44 0.43 $ Costs, per unit 0 X -0.47 -0.47 Income (Loss), per unit 4.01 X 3.97 X -0.04 Feedback Check My Work Partially correct Should Product T be sold (Alternative 1) or processed further into Product