Make$-$or$-$Buy DecisionMatchless Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $$57$ per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of $43\%$ of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows:Direct materials$$25$Direct labor$18$Factory overhead $(43\%$ of direct labor$)7\mathrm{.}74$Total cost per unit$$50\mathrm{.}74$If Matchless Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be $14\%$ of the direct labor costs.EX$\mathrm{.}25-03.$ALGO

EX$\mathrm{.}25-06$

EX$\mathrm{.}25-07.$ALGO

EX$\mathrm{.}25-08.$ALGO

EX$\mathrm{.}25-09.$ALGO

EX$\mathrm{.}25-12.$ALGO

EX$\mathrm{.}25-13.$ALGO

Direct labor

$18$

Factory overhead $(43\%$ of direct labor$),7\mathrm{.}74$

Total cost per unit

$$50\mathrm{.}74$

If Matchless Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be $14\%$ of the direct labor costs.

a$.$ Prepare a differential analysis dated February $24$ to determine whether the company should make $($Alternative $1)$ or buy $($Alternative $2)$ the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter $"0".$ For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis

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

February $24$

b$.$ Assuming there were no better alternative uses for the spare capacity, it would to manufacture the carrying cases. Fixed factory overhead is to this decision.

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