# Make or Buy Calculator

> Compare making a part with buying it, and find the cross-over volume.

Page: https://freecalculator.tech/tools/make-or-buy-calculator
Last reviewed: 2026-09-16

## Formula

Cost to make = (Volume × Cost to make per unit) + Avoidable fixed cost + One-off cost; Cost to buy = (Volume × (Price + Freight per unit)) + One-off cost

- Cost to make = (Volume × Cost to make per unit) + Avoidable fixed cost + One-off cost; Cost to buy = (Volume × (Price + Freight per unit)) + One-off cost.
- Inputs used: Currency, Units required, Cost to make, per unit, Fixed cost avoided if you stop making (optional), One-off cost of making (tooling, setup) (optional), Purchase price per unit, Freight and duty per unit (optional), One-off cost of buying (qualification, transition) (optional).
- Edge handling: Units required is required.; Units required cannot be negative.; Units required must be no more than 1000000000000.; Cost to make, per unit is required.; Cost to make, per unit cannot be negative..

## Inputs

- Currency
- Units required
- Cost to make, per unit
- Fixed cost avoided if you stop making (optional)
- One-off cost of making (tooling, setup) (optional)
- Purchase price per unit
- Freight and duty per unit (optional)
- One-off cost of buying (qualification, transition) (optional)

## Worked example: 5,000 units: make at $12.40 or buy at $13.90

Only the costs that change with the decision belong in the comparison.
1. Start with Currency: USD, Units required: 5000, Cost to make, per unit: 12.40, Fixed cost avoided if you stop making (optional): 0, One-off cost of making (tooling, setup) (optional): 0, Purchase price per unit: 13.90.
2. Apply the method: Cost to make = (Volume × Cost to make per unit) + Avoidable fixed cost + One-off cost; Cost to buy = (Volume × (Price + Freight per unit)) + One-off cost.
3. Only the costs that change with the decision belong in the comparison.

## Common questions

### Where does this formula come from?

Principles of Accounting, Volume 2: Managerial Accounting (OpenStax) — a make-or-buy comparison counts only the costs that change with the decision; costs incurred either way are irrelevant to it. See the source link on this page.

### What kind of calculation is this?

A relevant-cost comparison at a stated volume, with the cross-over volume where the two options cost the same. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.

### What are its limits?

Arithmetic over the figures entered — it cannot tell whether the costs, standards or allowances behind them are right. A target cost, an industry benchmark and the organisation's own standard are different things; only the figures entered are used. Cost only: quality, lead time, capacity, intellectual property and supply risk are not in the arithmetic. A single volume point; demand that varies should be tested at more than one volume.

### How do I use the Make or Buy Calculator?

Enter the required values for Currency, Units required, Cost to make, per unit, Fixed cost avoided if you stop making (optional), One-off cost of making (tooling, setup) (optional), and the other fields shown. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

### What formula does the Make or Buy Calculator use?

Cost to make = (Volume × Cost to make per unit) + Avoidable fixed cost + One-off cost; Cost to buy = (Volume × (Price + Freight per unit)) + One-off cost The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.

### Can the Make or Buy Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.

## Limitations and assumptions

- Inputs outside the supported range are rejected rather than forced into a result.
- The result depends on the values you enter for this make or buy calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

## Sources

- Rice University — https://openstax.org/books/principles-managerial-accounting/pages/1-introduction

## Cite this page

- APA: Free Calculator. (2026, September 16). Make or Buy Calculator. https://freecalculator.tech/tools/make-or-buy-calculator
- MLA: "Make or Buy Calculator." Free Calculator, 16 Sept. 2026, https://freecalculator.tech/tools/make-or-buy-calculator.
- Link: Make or Buy Calculator — Free Calculator, https://freecalculator.tech/tools/make-or-buy-calculator