Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offere purchase small bottles from an outside source for $99 per unit, plus $12 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Bottles Unit costs: Purchase price Freight Variablelcosts Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offere purchase small bottles from an outside source for $99 per unit, plus $12 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Bottles Unit costs: Purchase price Freight Variablelcosts Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

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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