Make$-$or$-$Buy Decision

The fixed overhead is an allocated expense; none of it would be eliminated if production of component DA stopped.

Required:

What are the alternatives facing Arches Manufacturing with respect to production of component DA$?$

Make the component in$-$house or to buy it from Canyonlands

List the relevant costs for each alternative. If required, round your answers to the nearest cent.

Total Relevant Cost

Make

$$

$x$ per unit

Buy

$s$

$$ per unit

Differential Cost to Make

$x$ per unit

Decrease $$ :

$x$

Conceptual Connection: Which alternative is better?