2) Make or Buy

A restaurant bakes its own bread for $152 per unit (100 loaves), including fixed costs of $39 per unit. A proposal is offered to purchase bread from an outside source for $105 per unit, plus $12 per unit for delivery.

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Prepare a differential analysis dated August 16, 2014, to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bread, assuming fixed costs are unaffected by the decision. If an amount is zero, enter zero "0".

Differential Analysis
Make Bread (Alt. 1) or Buy Bread (Alt. 2)
August 16, 2014
		Make Bread (Alternative 1)		Buy Bread (Alternative 2)		Differential Effect on Income (Alternative 2)
Unit Costs:
Purchase price per unit		$		$		$
Delivery per unit
Variable costs per unit
Fixed factory overhead per unit
Income (Loss) per unit		$		$		$