Tables 7.2 and 7.3 provide two different formats for presenting the same analysis. Describe the similarities and differences in these two formats.

Table 7.2

Table 7.3

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Make-or-Buy Differential Analysis for Best Boards Inc. (Make internally) Alternative 1 (Buy from outside) Differential Alternative 2 Amount Alternative 1 is: Variable costs: Cost to buy from outside $. 0 $ 700,000* = $(700,000) Lower Direct materials 300,000 0 = 300,000 Higher Direct labor 160,000 0 = 160,000 Higher Manufacturing overhead 100,000 0 = 100,000 Higher Fixed costs: Factory equipment lease 110,000 110,000 = 0 Factory building rent 290,000 290,000 = 0 Production supervisors' salaries 140,000 90,000** 50,000 Higher Total production costs $1,100,000 $1,190,000 = $ (90,000) Lower * $700,000 - $70 per unit x 10,000 units. **One supervisor must be paid $90,000 per year even if the company buys the product. The other supervisor, who is paid $50,000 per year, can be let go if the company buys the product.