Calculation

Make or Buy

Created on · make-or-buy

Compares decision-relevant in-house production costs with a firm purchase price.

Required Quantity

Additional Fixed Costs

Variable Internal Costs

Purchase Price

One-time Acquisition Costs

Bottleneck Time per Part

Lost Contribution Margin

How to use the result

Enter actual operating values. The calculation considers only the entered costs and quantities.

K_make = Kf_make + q · (kv + bottleneck time · lost contribution margin)

Sources: Managerial cost and performance accounting; formulas are shown transparently.