1. How are opportunity costs incorporated into make-or-buy decisions?
2. What factors other than costs must be considered before making a make-or-buy decision?
3. What is a keep-or-drop decision? What are the relevant variables in a keep-or-drop decision?
4. What factors other than costs and revenues must be considered when making a keep-or-drop decision?
Use the following information to determine the profit equation:
Selling price per unit $ 65
Variable cost per unit 24
Fixed cost per year 260,000