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Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $59 capacity, charges factory overhead to production at
Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $59 capacity, charges factory overhead to production at the rate of 41% of direct labor cost. The unit costs to produce con If Pizana Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and varial. expected to be 14% of the direct labor costs. a. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1 ) or buy two decimal places. If an amount is zero, enter " 0 ". Irrying cases for its portable computers at a purchase price of $59 per unit. The company, which is currently operating below full the rate of 41% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: fizana Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable f expected to be 14% of the direct labor costs. a. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1) or buy (Alte two decimal places. If an amount is zero, enter " 0 ". b. Assuming there were no better alternative uses for the spare capacity, it would to manufacture the ca to this decision. ing Case rying Case Differential Effects ative 2) (Alternative 2) re capacity, it would to manufacture the carrying cases. Fixed tactory overhead is
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