ques 6 ch.11

Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $55 per unit. The compary, which is currently operating below full capacity, charges factory overhead to production at the rote of 46% of direct fabor cost The unit costs to produce comparabl carrying cases are expected to be as follows: If Somerset Computer Company manufactures the carrying cases, fixed foctory overhead costs will not increase and varlable factory overhead costs associated, with the cases are expected to be 14% of the direct labor costs. a. Prepare o durerentaal analynis dated Aprit 30 to octermine whether the company should make (Alternative. 1) or buy (Alternative 2) the carrying case, If required, round your answers to two decimal piaces. If an amount is aero, enter "0: If Somerset 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 14% of the direct labor costs. a. Prepare a differential analysit dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two declmal places. If an amount is zero, enter "0*