Make-or-Buy DecisionCompanion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $56 per unit.The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 38% of directlabor cost. The total unit costs to produce comparable carrying cases are expected to be as follows:Direct materialsDirect laborFactory overhead (38% of direct labor)Total cost per unitIf Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factoryoverhead costs associated with the cases are expected to be 15% of the direct labor costs..Unit costs:$25.0016.006.08a. Prepare a differential analysis dated February 24 to determine whether the company should Make Carrying Case (Alternative 1) orBuy Carrying Case (Alternative 2). If required, round your answers to two decimal places. If an amount is zero, enter "0". Forthose boxes in which you must enter subtracted or negative numbers use a minus sign.Purchase priceDirect materials per unitDirect labor per unitVariable factory overhead per unitFixed factory overhead per unitTotal unit costs$47.08Differential AnalysisMake Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2)February 24Make CarryingCase (Alternative 1)0.00 ✓25.00 X16 xBuy CarryingCase (Alternative 2)56 XDifferential Effects(Alternative 2)

Name: Make-or-Buy DecisionCompanion Computer Company has been purchasing ca
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Make-or-Buy DecisionCompanion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $56 per unit.The company, which is currently operating below full capacity, charges factory overhead to production at