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A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for...

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Accounting

A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $67 per unit (100 bottles), including fixed costs of $22 per unit. A proposal is offered to purchase small bottles from an outside source for $35 per unit, plus $5 per unit for freight.

Prepare a differential analysis dated March 30, 2014, to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision

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