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 $39\%$ of

direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

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 $16\%$ 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 $"0".$

Differential Analysis

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

May $31$

b$.$ Assuming there were no better alternative uses for the spare capacity, it would

to manufacture the

carrying cases. Fixed factory overhead is

to this decision.