Jupiter Computer Company has been purchasing carrying cases for its portable com
ID: 2565049 • Letter: J
Question
Jupiter Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $111 per unit. The company, able rating below ful capo ty, darges factory overhead to production at the rate of 50% of direct labor cost. The fully absorbed unit costs to carrying cases are expected to be as follows: 40 20 5115 Factory overhead (50% of dred labor) Total cost per unt If Jupiter 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 10% of the direct labor costs. Required: A. Prepare a diffecontial a dated July 19 to determine whether the company should make Ailternative 1) or buy Alternative 2) the carrying case. Refer to the lests of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter '0. A colon (:) will automatically appear if required. All work saved 10:04 PM 11/6/2017Explanation / Answer
Differencial analysis
Alternative 1
Make
Alternative 2
Buy
If company make the carrying case company can save $12 per unit.
Alternative 1
Make
Alternative 2
Buy
Difference Purchase price 0 111 -111 Direct Material 55 0 55 Direct Labour 40 0 40 Variable factory overhead (40 * 10%) 4 0 4 Total 99 111 -12Related Questions
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