None Make or BuyA company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $168 per unit (100 bottles),including fixed costs of $36 per unit. A proposal is offered to purchase small bottles from an outside source for $98 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 AnalysisMake Bottles (Alt. 1) or Buy Bottles (Alt. 2)January 25MakeBottlesBuyBottlesDifferentialEffect(Alternative 1) (Alternative 2) (Alternative 2)Unit costs:Purchase priceXXXFreightXxxVariable costsFixed factory overheadXxxxXTotal unit costsxXb. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.Buy the bottles

Step 1:Answer a.Differential analysis:…

Answered: Make or Buy A company manufactures…

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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Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $168 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offered to purchase small bottles from an outside source for $98 per unit, plus $7 per unit for freight. a. Prepare a differential analysis dated July 31 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". Use a minus sign to indicate a loss. Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) July 31 Make Bottles (Alternative 1) Buy Bottles (Alternative 2) Differential Effect on Income (Alternative 2) Sales price $fill in the blank 8f0d72002061fde_1 $fill in the blank 8f0d72002061fde_2 $fill in the blank 8f0d72002061fde_3 Unit costs: Purchase price $fill in the blank 8f0d72002061fde_4 $fill in…
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