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Matt manages a camping store, where the to selling sleeping bag brings in $4600 of contribution margin for the company each month. The business manufactures
Matt manages a camping store, where the to selling sleeping bag brings in $4600 of contribution margin for the company each month. The business manufactures these sleeping bags, but its considering a contract with a new supplier for a similar quality product. The company contribution margin will go down to $1900 next month for the sleeping bags category if Matt decides to purchase from the supplier instead of manufacturing in house. If he decides to buy instead of make, there will be available capacity for other products. Matt estimates that the store can increase contribution margin in its other categories by at least $4300 per month with that extra capacity. If Matt better off buying these sleeping bags or making them? Total contribution margin, make? Total contribution margin, buy
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