Financial Analysis

What formulas should be used and when should they be used?

Expert Solution

Particulars	Make	Buy	Net Income Increase/Decrease
Var. Man. Costs	4.5 x 10,000 = $ 45000	0	45000
Fix. Man. Costs	3 x 10,000 = $ 30000	2 x 10,000 = $ 20,000	10000
Purchase Price		5 x 10,000 = $ 50,000	-50000
Total	7.5 x 10,000 = $ 75000	7 x 10,000 = $ 70,000	5000

Net Profit Increases by $ 5,000 if the part is bought instead of Making

Analysis has been done as required.

Soumik Mallick Choudhury answered 3 years ago

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