PART 1.

A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $152 per unit (100 bottles), including fixed costs of $33 per unit. A proposal is offered to purchase small bottles from an outside source for $103 per unit, plus $9 per unit for freight. a. Prepare a differential analysis dated January 25 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".

Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25

Make Bottles (Alternative 1) | Buy Bottles (Alternative 2) | Differential Effect (Alternative 2)

Unit Costs:

Purchase Price: __________ | __________ | ____________

Freight: __________ | __________ | ____________

Variable Costs: __________ | __________ | ____________

Fixed Factory Overhead: __________ | __________ | ____________

Total Unit Costs: __________ | __________ | ____________

PART 2.

Accept Business at Special Price

Product A is normally sold for $45 per unit. A special price of $31 is offered for the export market. The variable production cost is $22 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.

Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0".

Differential Analysis: Reject Order (Alt. 1) or Accept Order (Alt. 2) January

Reject Order (Alternative 1) | Accept Order (Alternative 2) | Differential Effect (Alternative 2)

Revenues, per unit: __________ | __________ | ____________

COST:

Variable manufacturing costs, per unit: __________ | __________ | ____________

Export tariff, per unit: __________ | __________ | ____________

Profit (loss), per unit: __________ | __________ | ____________

THANK YOU SO MUCH IN ADVANCE