hh. Subject :- Accounting Make-or-Buy DecisionPizena Computer Company has been purchesing carrying cases for its portable computers at a purchase price of $50 per unit. The company, which is currently operating below full capacity, charges factory overheadto production at the rate of 44% of direct isbor cost. The unit costs to produce comparable carrying cases are expected to be as followsDirect materials$30.0017.00Direct laborFactory overhead (44% of direct labor)7.48$54.40Total cost per unitIf Pizans 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 15% of the directorcostsa. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1) or buy (Acternative 2) the carrying case. Round your answers to two decimal places it an amountis 2010, enter "0"Line Item DescriptionUnit costsDifferential AnalysisMake (Alt. 1) or Buy (Alt. 2) Carrying CaseMay 31Purchase priceDirect materialsDirect laberVariable factory overheadFixed factory overheadTotal unit costsMake Carrying Case Buy Carrying Case(Alternative 1) (Alternative 2)Differential Effects(Alternative 2)

In this question, we will make the differential analysis for determining that carrying cases is…

Pizana Computer Company has been purchasing carrying cases for its portable con to production at the rate of 44% of direct labor cost. The unit costs to produce com Direct materials $30.00 Direct labor 17.00 Factory overhead (44% of direct labor) 7.48 Total cost per unit 154.40 Pzana Computer Company manufactures the carrying cases, fixed factory overt a. Prepare a offerential analysis dated May 31 to determine whether the compan zero, enter "0" Differential Analysis

Pizana Computer Company has been purchasing carrying cases for its portable con to production at the rate of 44% of direct labor cost. The unit costs to produce com Direct materials $30.00 Direct labor 17.00 Factory overhead (44% of direct labor) 7.48 Total cost per unit 154.40 Pzana Computer Company manufactures the carrying cases, fixed factory overt a. Prepare a offerential analysis dated May 31 to determine whether the compan zero, enter "0" Differential Analysis

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 7E: Make-or-buy decision Somerset Computer Company has been purchasing carrying cases for its portable...

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