Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $$60$ per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of $37\%$ of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

Direct materials

Direct labor

Factory overhead $(37\%$ of direct labor$)$

Total cost per unit

$$30\mathrm{.}00$

$21\mathrm{.}00$

$7\mathrm{.}77$

$$58\mathrm{.}77$

If Pizana Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be $13\%$ of the direct labor costs.

a$.$ Prepare a differential analysis dated May $31$ to determine whether the company should make $($Alternative $1)$ or buy $($Alternative $2)$ the carrying case. Round your answers to two decimal places. If an amount is zero, enter $"0".$

Difit:$-$ential Analysis

Make $($Alt$.1)$ or Buy $($Alt$.2)$ Carrying Case

May $31$

Line Item Description

Unit costs:

Purchase price

Direct materials

Direct labor

Variable factory overhead

Fixed factory overhead

Total unit costs

Make Carrying Case

$($Alternative $1)$

$

$

Buy Carrying Case

$($Alternative $2)$

$$

Differential Effects

$($Alternative $2)$