A restaurant bakes its own bread for a cost of $152 per unit (100 loaves), including fixed costs of $30 per unit. A proposal is offered to purchase bread from an outside source for $105 per unit, plus $11 per unit for delivery. Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Bread (Alt. 1) or Buy Bread (Alt. 2) July 7 Make Bread (Alternative 1) Buy Bread (Alternative 2) Differential Effect on Income (Alternative 2) Sales price $0 $0 $0 Unit Costs: Purchase price $fill in the blank 8cd8baf43f9c031_1 $fill in the blank 8cd8baf43f9c031_2 $fill in the blank 8cd8baf43f9c031_3 Delivery fill in the blank 8cd8baf43f9c031_4 fill in the blank 8cd8baf43f9c031_5 fill in the blank 8cd8baf43f9c031_6 Variable costs fill in the blank 8cd8baf43f9c031_7 fill in the blank 8cd8baf43f9c031_8 fill in the blank 8cd8baf43f9c031_9 Fixed factory overhead fill in the blank 8cd8baf43f9c031_10 fill in the blank 8cd8baf43f9c031_11 fill in the blank 8cd8baf43f9c031_12 Income (Loss)

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3BE: Make or buy A company manufactures various-sized plastic bottles for its medicinal product. The...

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A restaurant bakes its own bread for a cost of $152 per unit (100 loaves), including fixed costs of $30 per unit. A proposal is offered to purchase bread from an outside source for $105 per unit, plus $11 per unit for delivery.

Prepare a differential analysis dated July 7 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis
Make Bread (Alt. 1) or Buy Bread (Alt. 2)
July 7
	Make Bread (Alternative 1)	Buy Bread (Alternative 2)	Differential Effect on Income (Alternative 2)
Sales price	$0	$0	$0
Unit Costs:
Purchase price	$fill in the blank 8cd8baf43f9c031_1	$fill in the blank 8cd8baf43f9c031_2	$fill in the blank 8cd8baf43f9c031_3
Delivery	fill in the blank 8cd8baf43f9c031_4	fill in the blank 8cd8baf43f9c031_5	fill in the blank 8cd8baf43f9c031_6
Variable costs	fill in the blank 8cd8baf43f9c031_7	fill in the blank 8cd8baf43f9c031_8	fill in the blank 8cd8baf43f9c031_9
Fixed factory overhead	fill in the blank 8cd8baf43f9c031_10	fill in the blank 8cd8baf43f9c031_11	fill in the blank 8cd8baf43f9c031_12
Income (Loss)	$fill in the blank 8cd8baf43f9c031_13	$fill in the blank 8cd8baf43f9c031_14	$fill in the blank 8cd8baf43f9c031_15

Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread.

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