Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $24 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

Direct materials $8.00 Direct labor 12.00 Factory overhead (40% of direct labor) 4.80 Total cost per unit $24.80 If Somerset 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 25% of the direct labor costs.

Question Content Area a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If an amount is zero, enter "0". If required, round your answers to two decimal places.

Differential Analysis Make Carrying Case (Alt. 1) or Buy Carrying Case (Alt. 2) April 30 Make Carrying Case (Alternative 1) Buy Carrying Case (Alternative 2)

Differential Effects (Alternative 2) Unit costs: Purchase price $fill in the blank e58a82046015078_1 0.00 $fill in the blank e58a82046015078_2 24.00 $fill in the blank e58a82046015078_3 24.00 Direct materials fill in the blank e58a82046015078_4 8.00 fill in the blank e58a82046015078_5 0.00 fill in the blank e58a82046015078_6 -8.00 Direct labor fill in the blank e58a82046015078_7 12.00 fill in the blank e58a82046015078_8 0.00 fill in the blank e58a82046015078_9 -12.00 Variable factory overhead fill in the blank e58a82046015078_10 3.00 fill in the blank e58a82046015078_11 0.00 fill in the blank e58a82046015078_12 -3.00 Fixed factory overhead fill in the blank e58a82046015078_13 fill in the blank e58a82046015078_14 fill in the blank e58a82046015078_15 0.00 Total unit costs $fill in the blank e58a82046015078_16 $fill in the blank e58a82046015078_17 $fill in the blank e58a82046015078_18 -1.00