Chapter 23, Problem 4E

To determine

Making or buying a product:

The decision of whether to continue manufacturing a middle-end product or buying it is done on the basis of incremental revenue, If any decision thereof adds more to the business than it takes way, the decision is accepted. Care is taken to include only relevant costs in the analysis, and sunk costs need to be avoided.

Whether the company must continue to manufacture the part or buy the part from the outside supplier.