Make$-$or$-$buy decision $42\%$ of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

$\backslash$table$[[$Direct materials,$$27\mathrm{.}00$

A$1$

Make$-$or$-$buy decision

The following data is provided for Pizana Computer Company

B

$C$

D

E

$3$ The following data is provided for Pizana Computer Company:

$5$ DATA

$6$

$7.7$

$8$

$9$

$10$

$11$

$12$

$13$

$14$

$15$

Purchase price per unit

Factory overhead to production at the rate of direct labor cost

$382$

Direct materials

Direct labor

Factory overhead

Total cost per unit

Expected direct labor cost

$12\%$

REQUIRED:

$17$ Prepare a differential analysis dated May $31$ to determine whether the company should make $($Aliemative $1)$ or buy $($A$)$ternative $2)$ the caryying case

Using formulas and cell references from the problem data, perform the required analysis.

$18$ Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWY$2$ for grading.

$19$

$20$

$21$

$22$

$23$

$24$

Unit costs:

Purchase price

Direct materials

Direct labor

Variable factory overhead

Fixed factory overhead

Total unit costs

Differential Analysis

Make $($Ait$.1)$ or Buy $($Alt$.2)$ Carrying Case

May $31$

Make Carrying

Case

$($A$)$ternative $1)$

Buy Carrying

Differential

Case:

Effects

$($Altemative $2)$

$($Altemative $2)$

$\backslash$table$[[,\backslash$table$[[$Make Carrying$],[$Case$],[($A$)$ternative $1)]],\backslash$table$[[$Buy Carrying$],[$Case$],[($Altemative $2)]],\backslash$table$[[$Differential$],[$Effects$],[($Altemative $2)]]],[\backslash$table$[[$Purchase price$]]],[\{$

$\backslash$table$[[$Direct materials$],[$Direct labor$]]\}],[],[\{$

$\backslash$table$[[$Variable factory overnead$],[$Fixed factory overhead$]]\}],[],[$Total unit costs,,,$]]$

Formulas