Question: Pheonix Affair currently makes the King Component, incurring variable costs of $18 per unit and fixed costs of $4 per unit. The company has the

Pheonix Affair currently makes the King Component, incurring variable costs of $18 per unit and fixed costs of $4 per unit. The company has the option to purchase the component for $20 per unit. Prepare a differential analysis to determine if the company should make (Alternative 1) or (Alternative 2) the King Component. Assume that the fixed costs will be incurred in each situation up to 40,000 units. (Determine at what want point of sales does it make sense to purchase rather than buy)

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