Make or buy analysis
- also called outsourcing decision
- subtractors may be more productive and cost effective
Contribution
yeah
Absorption
- a cost is directly attributable to a product
- contribution does not allocate fixed costs between profit and/or cost centers
- absorption costing calculates the cost of a product by considering indirect expenses + direct expenses
- you split costs between departments
- for example, in your 200 sq.ft. facility with 5 department, one uses 4 square feet so 2% your total rent