Balboa Technologies Company has been buy carrying cases for its portable computers at a delivered cost of $20 per unit. The company, which is recently operating below full capacity, charges factory overhead to production at the rate of 60 percent of direct labor cost. The completely absorbed unit costs to produce comparable carrying cases are predictable to be as follows:
If Balboa Technologies Company produces the carrying cases, fixed factory overhead costs can't increase and variable factory overhead costs related with the cases are expected to be 20% of the direct labor cost.
a. Create a differential analysis report, dated 19th June, 2012, for the make-or-buy decision. Enter amounts to the nearest cent.