The president of Macon has come to you for advice. “It would cost me $280 to make
the sails,” she says, “but only $260 to buy them. Should I continue buying them, or have I
missed something?”
Instructions
(a) Prepare a per unit analysis of the differential costs. Briefl y explain whether Macon
should make or buy the sales.
(b) If Macon suddenly fi nds an opportunity to rent out the unused capacity of its factory
for $70,000 per year, would your answer to part (a) change? Briefl y explain.
(c) Identify three qualitative factors that should be considered by Macon in this make-orbuy
decision.