A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $152 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offered to purchase small bottles from an outside source for $101 per unit, plus $8 per unit for freight. Question Content Area 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 AnalysisMake 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 f9eaadf2e002fac_1 $fill in the blank f9eaadf2e002fac_2 $fill in the blank f9eaadf2e002fac_3 Unit costs: Purchase price $fill in the blank f9eaadf2e002fac_4 $fill in the blank f9eaadf2e002fac_5 $fill in the blank f9eaadf2e002fac_6 Freight fill in the blank f9eaadf2e002fac_7 fill in the blank f9eaadf2e002fac_8 fill in the blank f9eaadf2e002fac_9 Variable costs fill in the blank f9eaadf2e002fac_10 fill in the blank f9eaadf2e002fac_11 fill in the blank f9eaadf2e002fac_12 Fixed factory overhead fill in the blank f9eaadf2e002fac_13 fill in the blank f9eaadf2e002fac_14 fill in the blank f9eaadf2e002fac_15 Income (Loss) $fill in the blank f9eaadf2e002fac_16 $fill in the blank f9eaadf2e002fac_17 $fill in the blank f9eaadf2e002fac_18 Question Content Area b. Determine whether the company should make (Alt

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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Question Content Area

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 AnalysisMake 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 f9eaadf2e002fac_1	$fill in the blank f9eaadf2e002fac_2	$fill in the blank f9eaadf2e002fac_3
Unit costs:
Purchase price	$fill in the blank f9eaadf2e002fac_4	$fill in the blank f9eaadf2e002fac_5	$fill in the blank f9eaadf2e002fac_6
Freight	fill in the blank f9eaadf2e002fac_7	fill in the blank f9eaadf2e002fac_8	fill in the blank f9eaadf2e002fac_9
Variable costs	fill in the blank f9eaadf2e002fac_10	fill in the blank f9eaadf2e002fac_11	fill in the blank f9eaadf2e002fac_12
Fixed factory overhead	fill in the blank f9eaadf2e002fac_13	fill in the blank f9eaadf2e002fac_14	fill in the blank f9eaadf2e002fac_15
Income (Loss)	$fill in the blank f9eaadf2e002fac_16	$fill in the blank f9eaadf2e002fac_17	$fill in the blank f9eaadf2e002fac_18

Question Content Area

b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

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