Week 11 Chapter 25 Assignment Make or Buy A restaurant bakes its own bread for a

Question

Week 11 Chapter 25 Assignment Make or Buy A restaurant bakes its own bread for a cost of $152 per nt (300 loaves), eching fed costs of $35 per une. A propoal s oflered to parchese bread fromanue Prepare a déterestial analyus dated July 7 to determine wheer the comoayshou soace for per unit, phus 59 per unit for delivery for those boxes in which you mus Dillerential Anlyi Make Bread CA, 33 or Bury Bread (A. Alternative.) 1 eteative 2) (Alternativ. 2) Seling Price Faed factory overhead Incomse Lo Type here to

Explanation / Answer

Alternative 1 Alternative 2 Differential effect Make bread Buy bread on income Selling price 0 0 0 Unit cost Purchase price 0 -96 96 Delivery 0 -9 9 Variable cost -117 0 -117 Fixed factory overheads -35 -35 0 Income (loss) -152 -140 -12 Alternative 2 is better as it has less loss

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