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1ST PROBLEM SMALL BUSINESS DECISION DIFFERENCIAL ANALYSIS VMC RELEVANT DATA IN-HOUSE DIFFERENCE POSSIBLE UNITS TO SELL: OUTSOURCE OUTSOURCE $ PER UNIT DIFF INHOUSE $PER
1ST PROBLEM SMALL BUSINESS DECISION DIFFERENCIAL ANALYSIS VMC RELEVANT DATA IN-HOUSE DIFFERENCE POSSIBLE UNITS TO SELL: OUTSOURCE OUTSOURCE $ PER UNIT DIFF INHOUSE $PER UNIT: STATE ANALYSIS FOR ALL REQUIREMENTS BELOW: DIRECTIONS: SMALL BUSINESS DECISION DIFFERENTIAL ANALYSIS (MAKE IN-HOUSE OR OUTSOURCE DECISION): Printing Co. (a local print shop) is looking at outsourcing a rush print job to print 400 units at a cost of $38.00 per unit. Use the completed Breakeven Worksheet to help you complete a differential analysis table based on relevant data. Fixed & VS&A Costs will not change. The Printing Co. also has enough unused capacity to do make the units on their own, as well. Upon completing the differential analysis table comparing making vs. outsourcing, state your quantitative decision and then add QUALITATIVE FACTORS the management team might also use to make the final decision. REQUIREMENTS (Use Small Business Decisions Wkst): 1. Identify each cost in the income statement as relevant or irrelevant to the Print Co.'s decision. 2. Prepare a differential analysis to determine whether True Print should make or outsource this rush job. 3. Identify factors (short-term and long-term) the Print Co. should consider in deciding whether to accept the outsourced rush order.
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