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Problem 3 Marburg Manufacturing produces various-sized plastic panels for its main product. The manufacturing cost for small bottles is SAR 210 per unit, including fixed
Problem 3 Marburg Manufacturing produces various-sized plastic panels for its main product. The manufacturing cost for small bottles is SAR 210 per unit, including fixed costs of SAR 65 per unit. A proposal is offered to purchase plastic panels from an outside source for SAR 185 per unit, plus SAR 7 per unit for freight. Required: Prepare a differential analysis to determine whether the company should make (Alternative 1) or buy (Alternative 2) for bottles, assuming fixed costs are not affected by the decision. Problem 4 Whole milk is produced for SAR 18 per gallon. Whole milk can be sold without additional processing for SAR 25 per gallon or processed further into ice cream at an additional cost of SAR 9 per gallon. Ice cream can be sold for SAR 32 per gallon. Required: Prepare a differential analysis on whether to sell whole milk (Alternative 1), or process further into ice cream (Alternative 2)
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