In a make-or-buy decision, the cost to buy is compared with the*1 pointVariable selling & administrative expensesTotal cost to makeNone of the aboveContribution MarginVariable manufacturing costs

In a make-or-buy decision, the cost to buy is compared with the Total cost to make. This decision involves considering the costs associated with producing a product or service internally versus the cost of purchasing it externally.

Here are the steps:

1. Identify the relevant costs: These include both the direct and indirect costs of production, such as labor, materials, overhead costs, and any additional costs that may be incurred as a result of the production process.

2. Calculate the total cost to make the product or service: This includes all the relevant costs identified in the first step.

3. Obtain quotes or estimates for the cost to buy the product or service: This could involve getting quotes from suppliers or estimating the cost based on market prices.

4. Compare the cost to make with the cost to buy: If the cost to make the product or service is less than the cost to buy, then it may be more cost-effective to produce the product or service internally. If the cost to buy is less, then it may be more cost-effective to purchase the product or service externally.

5. Consider other factors: There may be other factors that could influence the decision, such as the capacity to produce, the quality of the product or service, and the relationship with suppliers.

6. Make the decision: Based on the comparison and the consideration of other factors, make the decision whether to make or buy the product or service.