Alanco, Inc. manufactures a variety of products and is currently manufacturing all of its own component parts. An outside supplier has offered to sell one of those components to Alanco. The Controller has asked you to help evaluate this offer to determine if the company should make or buy the component. Use the information included in the Excel Simulation and the Excel functions described below to complete the task.

• Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, =C4 was entered, the formula would output the result from cell C4, or 27,000,000 in this example.
• Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), * (asterisk sign to multiply), and / (forward slash to divide). From the Excel Simulation below, if in a blank cell =C14+C15 was entered, the formula would add the values from those cells and output the result, or 2,900,000 in this example. If using the other math symbols the result would output an appropriate answer for its function.
• IF function: Allows you to test a condition and return a specific value is the result is true and different value if the result is false. The syntax of the IF function is =IF(test_condition,value_if_true,value_if_false) and specific considerations need to be made when using this function. The test_condition argument is an evaluation of the status of a cell, such as if the value of a cell is greater than, less than, or equal to another number or cell. The value_if_true and value_if_false arguments will return any specific result for each option, such as another cell reference, a value, or text. Throughout the entire equation, if text is being used in the test_condition, value_if_true, or value_if_false arguments then the text itself should be entered in quotations so that Excel will recognize the text as a string of text instead of another function. From the Excel Simulation below, if in a blank cell =IF(C8>1000000,Net income is good,Net income is bad) was entered, the formula would output the result of the value_if_true since the test_condition would be result as true, or in this case the text Net income is good. Excel processes the IF function by separating it out into separate parts. First the test_condition Excel thinks, find cell C8 and determine if the value is greater than 1,000,000. Once Excel determines if the result of that test_condition is TRUE or FALSE, it will return the value_if_true or value_if_false.
• Absolute Reference: Allows you to maintain the original cell reference when a formula is copied to another cell. The cell reference is locked by putting a dollar sign ($) before the column and row references. By default a cell reference is relative, so when you copy a formula to another cell the values update based on a relative reference. For example, if you copy the formula =B8+B9 from cell C1 to cell C2, the formula in cell C2 will relatively update to be =B9+B10 since the copied formula moved down one cell, the formula cell references also moved down one cell. Conversely, by adding the absolute cell reference locks to the equation, the formula will not change when copied to any other cell. For example, =$B$8+$B$9 written in cell C1 is copied to cell C2, the formula in cell C2 will remain =$B$8+$B$9. You can also use a mixed cell reference by only locking the column or row only ($B8 or B$8) which locks that specific column or row and the other reference becomes a relative reference and moves with the formula as its copied to another cell. For example, if you copy the formula =B$8+B9 from cell C1 to cell C2, the formula in cell C2 will update to be =B$8+B10 since the copied formula moved down one cell, the formula cell relative references also moved down one cell, but the absolute locked reference remained the same. For this project, when using Absolute Cell Referencing, you can also use the auto-fill option, however, for proper grading you should only auto-fill one cell at a time and not an entire range.

X 5 Prepare a make or buy analysis - Excel ? FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In X Calibri 11 = % Paste BIU- Cells Alignment Number Conditional Format as Cell Formatting Table Styles Styles Clipboard Font 19 fax . A B D E F G H 1 Alanco, Inc. manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: 4 6 7 8 5 Direct materials $ 4.00 Direct labor 6.00 Variable manufacturing overhead 2.00 Fixed manufacturing traceable* 5.00 9 Fixed manufacturing overhead, common but allocated 8.00 10 Total cost $ 25.00 11 12 Supplier price $ 21.00 13 14 Units used per year 12,000 15 16 *Fixed manufacturing overhead, traceable is composed of two items: 17 Depreciation of equipment (no resale value) 30% 18 Supervisor salary 70% 19 20 1. Assuming the company has no alternative use for the facilities now being used to produce the | 21 component, complete the following analysis to determine if the outside supplier's offer should be accepted. 22 23 Per Unit Differential Cost 12,000 units Sheet1 I READY Attempt(s) + 100% Hint X Prepare a make or buy analysis - Excel ? FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In X Calibri 11 AA % be Paste BIU- Alignment Number Conditional Format as Cell Formatting Table Styles Cells Clipboard Font Styles 19 : A B D E F G H 18 Supervisor salary 70% 19 20 1. Assuming the company has no alternative use for the facilities now being used to produce the 21 component, complete the following analysis to determine if the outside supplier's offer should be accepted. 22 23 Per Unit Differential Cost Make Buy 12,000 units Make Buy 24 25 26 Cost of purchasing 27 Direct materials 28 Direct labor 29 Variable manufacturing overhead 30 Fixed manufacturing overhead, traceable 31 Fixed manufacturing overhead, common 32 Total costs 33 | 34 Based on this analysis, write an if statement to determine if Alanco should make or buy the component. 35 Alanco should the component 37 36 38 39 40 Sheet1 18 1 + 100% READY Attempt(s) Hint