Make/Buy

Flying High is holding discussions on whether or not it is beneficial for them to make their own delicious flight meals in house rather than purchase them from a supplier. They have found that they can purchase the meals for $4 per meal. The costs associated with preparing these meals in house are as follows:

Per Meal

Ingredients $2.25

Beverage $0.50

Labor $0.75

Packaging $0.40

Equipment $1.20

Storage $0.30

Delivery $0.15

Kitchen Managers Salary $0.90

TOTAL $6.45

Beverages do not come with the suppliers meals so those would have to be purchased either way. The equipment to prepare the meals in house has not been purchased yet not has the kitchen staff been hired (including labor workers and managers). The meals and beverages must be stored and delivered at the cost of Flying High regardless of how they attain the meals.

It is more beneficial for Flying High to prepare the meals in house or to purchase them from a supplier? What is the cost difference per meal?