Structuring a Make$-$or$-$Buy Problem

Direct materials

Direct labor

Variable manufacturing overhead

Variable marketing overhead

Fixed plant overhead

Total

Required:

What are the alternatives for Fresh Foods?

Make the ingredient in house and sell it externally. $,x$

List the relevant cost$(s)$ of internal production and of external purchase.

Purchase price $,x$

Which alternative is more cost effective and by how much? $($Use total cost when giving your answer.$)$

$$

$x$

x