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A company manufactures various sized plastic bottles for its medicinal
A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $ 67 per unit (100 bottles), including fixed costs of $ 22 per unit. A proposal is offered to purchase small bottles from an outside source for $ 35 per unit, plus $ 5 per unit for freight. Prepare a differential analysis dated March 30, 2014, to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision.
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