ACCOUNTING 236-A restaurant bakes its own bread for a cost
Question # 00675866
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Updated on: 04/23/2018 08:48 AM Due on: 04/23/2018
Make or buy
A restaurant bakes its own bread for a cost of $165 per unit (100 loaves), including fixed costs of $43 per unit. A proposal is offered to purchase bread from an outside source for $110 per unit, plus $15 per unit for delivery. How to calculate a differential analysis dated August 16 to determine whether the company should make (Alternative 1) or buy (-Alternative 2) the bread, assuming fixed costs are unaffected by the decision.
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Solution: ACCOUNTING 236-A restaurant bakes its own bread for a cost