Answer:
a. 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 $57 $fill in the blank f5728bf69052fef_2 -$57
Direct materials $27 $fill in the blank f5728bf69052fef_5 $27 - $fill in the blank f5728bf69052fef_5
Direct labor $17 $fill in the blank f5728bf69052fef_8 $17 - $fill in the blank f5728bf69052fef_8
Variable factory overhead $2.72 $fill in the blank f5728bf69052fef_11 $2.72 - $fill in the blank f5728bf69052fef_11
Fixed factory overhead $0 $fill in the blank f5728bf69052fef_14 $0 - $fill in the blank f5728bf69052fef_14
Total unit costs $51.72 $fill in the blank f5728bf69052fef_17 $51.72 - $fill in the blank f5728bf69052fef_17
b. Based on the information provided, it would be better to make the carrying cases, as the unit cost of $51.72 is less than the purchase price of $57. The fixed factory overhead is not relevant to this decision, as it will not change whether the company makes or buys the carrying cases, since the company is currently operating below full capacity.