Act on the result
Verify supplier scope, quality and lead-time risks before acting on the lower entered cost.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this comparison calculator helps you decide
Best for
Businesses comparing internal production with an external supplier on incremental economics.
Outputs
Make cost, buy cost, capacity effect, option difference and crossover volume.
Start here
Exclude sunk costs and enter only costs and capacity that change between the two options.
Use a different tool when: Do not use this to choose the highest-contribution use of a constrained operating resource; use Capacity Constraint Profit Planner for that decision. Use this tool to compare incremental internal production cost with supplier purchase economics.
Profit & break-even
Make vs Buy: make cost
Make cost, buy cost, capacity effect, option difference and crossover volume.
Amounts use the same currency as your inputs. No currency conversion is performed.
Make vs Buy
Compare the incremental cost and capacity of making units internally with buying them, while keeping committed sunk cost visible but outside the decision.
Your numbers stay in this browser
Enter the whole units required for the decision period.
Record committed cost for disclosure; the engine explicitly excludes it from the comparison. Use one consistent ex-tax currency basis.
Include only avoidable or new fixed cost for make. Use one consistent ex-tax currency basis.
Include only cost that changes per unit for make. Use one consistent ex-tax currency basis.
Enter the maximum whole units make can deliver in the period.
Include only avoidable or new fixed cost for buy. Use one consistent ex-tax currency basis.
Include only cost that changes per unit for buy. Use one consistent ex-tax currency basis.
Enter the maximum whole units buy can deliver in the period.
Decision result
Review the operating threshold and incremental comparison on the same entered capacity, cost and demand basis.
- Make incremental cost
- 1,680.00
- Buy incremental cost
- 2,020.00
- Lower-cost feasible option
- Make
- Cost crossover units
- 92 units
- Make capacity gap
- 0 units
- Buy capacity gap
- 0 units
- Excluded sunk cost
- 9,000.00
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Entered scenario1,680.00Baseline
Lower Required units1,632.00-48.00
Higher Required units1,728.0048.00
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Make incremental cost
Make incremental cost
make incremental fixed cost + required units × make incremental cost per unit, if capacity is sufficient1,680.00Result1,680.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Make incremental costUnits
- 120
- Make incremental costCurrent Sunk Cost
- 9,000
- Make incremental costLeft Incremental Fixed Cost
- 1,200
- Make incremental costLeft Incremental Variable Cost Per Unit
- 4
- Make incremental costLeft Capacity Units
- 150
- Make incremental costRight Incremental Fixed Cost
- 100
- Make incremental costRight Incremental Variable Cost Per Unit
- 16
- Make incremental costRight Capacity Units
- 1,000
Buy incremental cost
Buy incremental cost
buy incremental fixed cost + required units × buy incremental cost per unit, if capacity is sufficient2,020.00Result2,020.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Buy incremental costUnits
- 120
- Buy incremental costCurrent Sunk Cost
- 9,000
- Buy incremental costLeft Incremental Fixed Cost
- 1,200
- Buy incremental costLeft Incremental Variable Cost Per Unit
- 4
- Buy incremental costLeft Capacity Units
- 150
- Buy incremental costRight Incremental Fixed Cost
- 100
- Buy incremental costRight Incremental Variable Cost Per Unit
- 16
- Buy incremental costRight Capacity Units
- 1,000
Lower-cost feasible option
Lower-cost feasible option
compare the two exact incremental costs after capacity feasibilityleftResultMake
Uses the exact shared engine result and only the entered market-neutral operating assumptions.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Lower-cost feasible optionUnits
- 120
- Lower-cost feasible optionCurrent Sunk Cost
- 9,000
- Lower-cost feasible optionLeft Incremental Fixed Cost
- 1,200
- Lower-cost feasible optionLeft Incremental Variable Cost Per Unit
- 4
- Lower-cost feasible optionLeft Capacity Units
- 150
- Lower-cost feasible optionRight Incremental Fixed Cost
- 100
- Lower-cost feasible optionRight Incremental Variable Cost Per Unit
- 16
- Lower-cost feasible optionRight Capacity Units
- 1,000
Cost crossover units
Cost crossover units
ceiling((right fixed cost − left fixed cost) / (left unit cost − right unit cost)), when reachable within both capacities92 unitsResult92 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Cost crossover unitsUnits
- 120
- Cost crossover unitsCurrent Sunk Cost
- 9,000
- Cost crossover unitsLeft Incremental Fixed Cost
- 1,200
- Cost crossover unitsLeft Incremental Variable Cost Per Unit
- 4
- Cost crossover unitsLeft Capacity Units
- 150
- Cost crossover unitsRight Incremental Fixed Cost
- 100
- Cost crossover unitsRight Incremental Variable Cost Per Unit
- 16
- Cost crossover unitsRight Capacity Units
- 1,000
Make capacity gap
Make capacity gap
max(0, required units − make capacity)0 unitsResult0 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Make capacity gapUnits
- 120
- Make capacity gapCurrent Sunk Cost
- 9,000
- Make capacity gapLeft Incremental Fixed Cost
- 1,200
- Make capacity gapLeft Incremental Variable Cost Per Unit
- 4
- Make capacity gapLeft Capacity Units
- 150
- Make capacity gapRight Incremental Fixed Cost
- 100
- Make capacity gapRight Incremental Variable Cost Per Unit
- 16
- Make capacity gapRight Capacity Units
- 1,000
Buy capacity gap
Buy capacity gap
max(0, required units − buy capacity)0 unitsResult0 units
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Buy capacity gapUnits
- 120
- Buy capacity gapCurrent Sunk Cost
- 9,000
- Buy capacity gapLeft Incremental Fixed Cost
- 1,200
- Buy capacity gapLeft Incremental Variable Cost Per Unit
- 4
- Buy capacity gapLeft Capacity Units
- 150
- Buy capacity gapRight Incremental Fixed Cost
- 100
- Buy capacity gapRight Incremental Variable Cost Per Unit
- 16
- Buy capacity gapRight Capacity Units
- 1,000
Excluded sunk cost
Excluded sunk cost
current sunk cost disclosed but excluded from both incremental options9,000.00Result9,000.00
Uses the exact shared engine result and only the entered market-neutral operating assumptions. The engine retains raw precision; display formatting does not feed calculation.
Make vs Buy Comparison formulas →Inputs used by these formula steps
- Excluded sunk costUnits
- 120
- Excluded sunk costCurrent Sunk Cost
- 9,000
- Excluded sunk costLeft Incremental Fixed Cost
- 1,200
- Excluded sunk costLeft Incremental Variable Cost Per Unit
- 4
- Excluded sunk costLeft Capacity Units
- 150
- Excluded sunk costRight Incremental Fixed Cost
- 100
- Excluded sunk costRight Incremental Variable Cost Per Unit
- 16
- Excluded sunk costRight Capacity Units
- 1,000
Inputs used
- Required units
- 120
- Current sunk cost
- 9,000
- Make incremental fixed cost
- 1,200
- Make incremental cost per unit
- 4
- Make capacity
- 150
- Buy incremental fixed cost
- 100
- Buy incremental cost per unit
- 16
- Buy capacity
- 1,000
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| currentSunkCost | Record committed cost for disclosure; the engine explicitly excludes it from the comparison. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 9000 |
| leftCapacityUnits | Enter the maximum whole units make can deliver in the period. | units/period | 0 to 100000000 | Required | 150 |
| leftIncrementalFixedCost | Include only avoidable or new fixed cost for make. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 1200 |
| leftIncrementalVariableCostPerUnit | Include only cost that changes per unit for make. Use one consistent ex-tax currency basis. | currency units/unit, ex tax | 0 to 10000000 | Required | 4 |
| rightCapacityUnits | Enter the maximum whole units buy can deliver in the period. | units/period | 0 to 100000000 | Required | 1000 |
| rightIncrementalFixedCost | Include only avoidable or new fixed cost for buy. Use one consistent ex-tax currency basis. | currency units/decision period, ex tax | 0 to 10000000 | Required | 100 |
| rightIncrementalVariableCostPerUnit | Include only cost that changes per unit for buy. Use one consistent ex-tax currency basis. | currency units/unit, ex tax | 0 to 10000000 | Required | 16 |
| units | Enter the whole units required for the decision period. | units/period | 0 to 100000000 | Required | 120 |
Make vs Buy: make cost
Use incremental option costs and capacity effects; sunk internal costs should not bias the comparison.
Formula summary
- Primary formula
- compare the two exact incremental costs after capacity feasibility.
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest lower volume, supplier price increases and internal capacity displacement.
When this estimate can be misleading
- Volumes, rates, capacity, time, costs and contribution are your records or scenarios; no benchmark or demand forecast is embedded.
- Keep all money and operating records on one consistent ex-tax basis and decision period.
- Incremental comparisons exclude disclosed sunk cost and do not guarantee demand, delivery capacity or a commercial outcome.
- This is educational business decision support, not accounting, tax, legal or financial advice.
- Use incremental option costs and capacity effects; sunk internal costs should not bias the comparison.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- Make vs Buy a Component
Compare avoidable internal cost with supplier cost, capacity use, timing and risk on one component requirement.
Read guide
Frequently asked questions
How do I compare incremental internal production cost with supplier purchase economics?
Verify supplier scope, quality and lead-time risks before acting on the lower entered cost.
What should stay consistent when I compare the options?
Keep the time basis, units and included costs consistent across options, then verify the assumptions that create the largest difference.