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incremental analysis for CISCO | ||||
Make CISCO | Buy CISCO | Net income increase (Decrease) | ||
Direct material (8000*4.60) | 36800 | 0 | 36800 | |
Direct labor (8000*4.19) | 33520 | 0 | 33520 | |
indirect labor (8000*0.42) | 3360 | 0 | 3360 | |
utilities (8000*0.40) | 3200 | 0 | 3200 | |
depreciation | 2820 | 920 | 1900 | |
property taxes | 810 | 270 | 540 | |
insurance | 1500 | 630 | 870 | |
purchase price | 77520 | -77520 | ||
freight & inspection (8000*0.34) | 2720 | -2720 | ||
receiving cost | 1300 | -1300 | ||
total annual cost | 82010 | 83360 | -1350 | |
Company should MAKE CISCO | ||||
Make CISCO | Buy CISCO | Net income increase (Decrease) | ||
Direct material (8000*4.60) | 36800 | 0 | 36800 | |
Direct labor (8000*4.19) | 33520 | 0 | 33520 | |
indirect labor (8000*0.42) | 3360 | 0 | 3360 | |
utilities (8000*0.40) | 3200 | 0 | 3200 | |
depreciation | 2820 | 920 | 1900 | |
property taxes | 810 | 270 | 540 | |
insurance | 1500 | 630 | 870 | |
purchase price | 77520 | -77520 | ||
freight & inspection (8000*0.34) | 2720 | -2720 | ||
receiving cost | 1300 | -1300 | ||
Opportunity cost | 3000 | 3000 | ||
total annual cost | 85010 | 83360 | 1650 | |
Company should BUY CISCO |
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