essDiagnos Onine teaching and learning resource from Ce tion OLB Spring 2018 CO

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essDiagnos Onine teaching and learning resource from Ce tion OLB Spring 2018 CO Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $62 per unit. The company. which is mently operating below full capacity, charges factory overhead to production at the rate of 37% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials Direct labor essDiagnos 8.tar.gz $26 19 7.03 $52.03 BIO factory overhead (37% of direct labor) Total cost per unit If Fremont Computer Company manufactures the carrying cases, fioxed factory overheed costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs. Ka. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the essDiagnos 1...6.tar.z carrying case. If required, round your answere to two decimal places. If an amount is zero, enter 'or, use a minus sign to indicate a loss. Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) 30 anish hw Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2) Differential Efflect on Income (Alternative 2) Sales price Unit costs: Purchase price0 Direct materials Previous Next Check My Work Save and Exit Submit Assignment for Grading

Explanation / Answer

Make carrying case Buy carrying case Differential effect on income Sales price 0 0 0 Units costs: Purchase price 62 -62 Direct materials 26 26 Direct labor 19 19 Variable factory overhead 2.85 2.85 Fixed factory overhead 4.18 4.18 0 Income(loss) -52.03 -66.18 -14.15

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