Question: Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $58 per unit. The company, which is currently
Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $58 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 44% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Line Item Description Amount Direct materials $29.00 Direct labor 22.00 Factory overhead (44% of direct labor) 9.68 Total cost per unit $60.68 If Pizana 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 16% of the direct labor costs. Question Content Area a. Prepare a differential analys
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