Question

Instructions Labels and Amount Descriptions Differential Analysis Final Question Instructions Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of 567 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 50% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials Direct labor Factory overhead (50% of direct labor) 10 Total cost per unit If Fremont Computer Company manufactures the carrying cases forced factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 1556 of the direct labor costs Required: a Prepare a cre a ted September 3010 determine whether the company should make heative or buy remete 2 the carrying case refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for externes Formose bores

Answer 1

Fremont Computer company
	Make	Buy	Differential
Sales Price	0	0	0
Unit costs :
Purchase price	0	67	67
DM	40	0	-40
DL	20	0	-20
Var. FOH ( 20* 15 % )	3	0	-3
Fixed FOH ( 10 - 3 )	7	7	0
Income / Loss	-70	-74	-4
It is advisable to make the carrying cases.