Make or Buy A restaurant bakes its own bread for a cost of $156 per unit (100 loaves), including fixed costs of $35 per unit. A proposal is offered to purchase bread from an outside source for $101 per unit, plus $12 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 "O". 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 Differential Effect Make Bread (Alternative 1) (Alternative 2) Buy Bread on Income (Alternative 2) Sales price $0 $0 $0 Unit Costs: 101 X 101 X Purchase price 0 12 X 12 Delivery X Variable costs 121 121 35 X 35 X 0 Fixed factory overhead 156 X 148 Income (Loss) X X

Make or Buy A restaurant bakes its own bread for a cost of $156 per unit (100 loaves), including fixed costs of $35 per unit. A proposal is offered to purchase bread from an outside source for $101 per unit, plus $12 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 "O". 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 Differential Effect Make Bread (Alternative 1) (Alternative 2) Buy Bread on Income (Alternative 2) Sales price $0 $0 $0 Unit Costs: 101 X 101 X Purchase price 0 12 X 12 Delivery X Variable costs 121 121 35 X 35 X 0 Fixed factory overhead 156 X 148 Income (Loss) X X

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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