solve pls?
Make-or-Buy Decision Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $58 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 43% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $25 Direct labor 18 Factory overhead (43% of direct labor) 7.74 Total cost per unit $50.74 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 analysis 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 decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Make Buy Carrying Carrying Case Case (Alternative 1) (Alternative 2) Differential Effects (Alternative 2) Unit costs: Purchase price 0 Total cost per unit $50.74 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 analysis 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 decimal places. If an amount is zero, enter "0". Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Make Buy Carrying Carrying Case Case (Alternative 1) (Alternative 2) Differential Effects (Alternative 2) Unit costs: Purchase price 0 Direct materials 25 0 Direct labor 18 Variable factory overhead 2.52 Fixed factory overhead 5.22 5.22 Total unit costs 50.74 Feedback A company is considering replacing an old piece of machinery, which cost $602,600 and has $351,900 of accumulated depreciation to date, with a new machine that has a purchase price of $484,600. The old machine could be sold for $61,000. The annual variable production costs associated with the old machine are estimated to be $155,800 per year for eight years. The annual variable production costs for the new machine are estimated to be $100,800 per year for eight years. a. 1 Prepare a differential analysis dated May 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential Analysis Continue with Old Machine (Alt. 1) or Replace Old Machine (Alt. 2) May 29 Continue Replace with old old Differential Machine Machine Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues: Proceeds from sale of old machine 0 Costs: Purchase price 0 Variable productions costs (8 years) Profit (Loss) b. What is the sunk cost in this situation? The sunk cost is $ x X
