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Make-or-Buy Decision Balboa Technologies Company...




Make-or-Buy Decision Balboa Technologies Company has been purchasing carrying cases for its portable computers at a delivered cost of $20 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 60% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: If Balboa Technologies 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 20% of the direct labor costs. Hide a. Prepare a differential analysis report, dated June 19, 2012, for the make-or-buy decision. Enter amounts to the nearest cent. Balboa Technologies Company Proposal to Manufacture Carrying Case June 19, 2012 Purchase price of carrying case $ Differential cost to manufacture carrying case: Direct materials $ Direct labor Variable factory overhead $


Paper#8122 | Written in 18-Jul-2015

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