Make or Buy Analysis Gaelcorp Wants to know whether they should make or buy Killian Hats Maroon Co will produce the hats for $110 per unit Gaelcorp needs 1000 hats If Gaelcorp does not make the hats it can make Killian Boots at a profit of $35,000 unit BUY Make 50 40 10 20 120 DM DL VOH FOH Purchase Total cost Opportunity Cost Total Costs after Opportunity Unprofitable Division Analysis Divisions Revenue less VC CM FC NI Gold Greatest Gael 200000 80000 120000 100000 20000 700000 60000 640000 40000 600000 Total 100000 1000000 88000 228000 12000 772000 70000 210000 -58000 562000 Gael Greatest Total Calculate the income without Greatest Division Fixed Costs cannot be eliminated and woud be taken by Gael division Gold Revenue less VC CM FC NI