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Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $24 per unit. The company, which is currently

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image text in transcribed Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $24 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: 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 25% 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 an amount is zero, enter " 0 ". If required, round your answers to two decimal places. b. Assuming there were no better alternative uses for the spare capacity, it wouldl factory overhead is to manufacture the carrying cases. Fixed

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