Integrated Excel: Preparing a Make or Buy Analysis

Alanco, Incorporated manufactures a variety of products and is currently manufacturing all of its own component parts. An outside supplier has offered to sell one of those components to Alanc.. The Controller has asked you to help evaluate this offer to determine if the company should make or buy the component.

Direct materials

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead, traceable$*$

Fixed manufacturing overhead, common but allocated

Total cost

$$4\mathrm{.}00$

$6\mathrm{.}00$

$2\mathrm{.}00$

$5\mathrm{.}00$

$8\mathrm{.}00$

$$25\mathrm{.}00$

Supplier price $$21\mathrm{.}00$

Units used per year

The fixed manufacturing overhead, traceable

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