Unit 80000

per unit Selling Price 40

DM 9.5
DL 10
Variable MOH 2.8
Fixed MOH 5 400000
Variable S&A 1.7
Fixed S&A 4.5 360000 4
Total 33.5
5
1 Unit increase 20000 Make or Buy
Increase in Revenue 800000
Increase in Cost Outside purchased
DM 190000 DM
DL 200000 DL
Variable MOH 56000 Variable MOH
Variable S&A 34000 Variable S&A
Fixed S&A 150000 Fixed MOH
630000 Fixed S&A
Net advantages 170000 Total
Extra
2 Variable cost/unit
DM 9.5
DL 10
Variable MOH 2.8
Variable S&A 1.5
Total Variable 23.8

Fixed cost/unit 0.7

Break-even price 24.5

 3 25% normal
Units
Price
Revenue
DM
DL
Variable MOH
Fixed MOH
COGS
Variable S&A
Per unit Fixed S&A
Make Buy NOI
31.32
9.5 Total cost
10 Save
2.8 Net
1.02 Price
3.5
4.5
31.32
Closed
5000 0
40 40
200000 0
47500 0
50000 0
14000 0
100000 60000
-11500 -60000
8500 0
90000 60000
-110000 -120000

310000
120000
190000
38