Soda Bottling, Inc., currently bottles its own soda drinks. Management is interested in outsourcing the production of bottles to a reputable manufacturing company that can supply the bottles for $0.04 each. Soda Bottling incurs the following monthly production costs to produce 1,000,000 bottles internally.

	Per Unit	Total Monthly Cost at 1 million units
Variable Production Cost	$ 0.02	$ 20,000
Fixed Production Cost		25,000
Total Production Cost		45,000

If production is outsourced, all variable production costs and 70 percent of fixed production costs will be eliminated.

Perform differential analysis (Make internally vs. Buy from outside) by completing the following table (separate thousands with comma):

	Make internally	Buy from outside
Cost to buy from outside	$	$
Variable production cost
Fixed production cost
Total cost	$	$

Which alternative is best (Make internally or Buy from outside)?

Assume all the facts of this problem remain the same. However, management of Soda Bottling has an opportunity to lease the space it currently uses to produce bottles for $6,000 per month if production of bottles is outsourced. Perform differential analysis (Make internally vs. Buy from outside) by completing the following table (separate thousands with comma):

	Make internally	Buy from outside
Cost to buy from outside	$	$
Variable production cost
Fixed production cost
Opportunity cost
Total cost	$	$

Given the opportunity to lease the space it currently uses to produce bottles for $6,000 per month if production of bottles is outsourced, which alternative is best (Make internally or Buy from outside)?