WorldSystems

Incremental Analysis for Outsourcing Decision

Make Buy

Unit Unit Difference

Variable cost per unit:

Direct materials $$8\mathrm{.}00$ $$0\mathrm{.}00$ $$8\mathrm{.}00$

Direct labor $1\mathrm{.}000\mathrm{.}001\mathrm{.}00$

Variable overhead $2\mathrm{.}000\mathrm{.}002\mathrm{.}00$

Purchase price from outsider $0\mathrm{.}008\mathrm{.}50(8\mathrm{.}50)$

Variable cost per unit $$11\mathrm{.}00$ $$8\mathrm{.}50$ $$2\mathrm{.}50$