BTS manufactures several components for a clock radio and assembles these parts as well. Recently, he noticed that the amount of time and resources spent on making those individual components is too much. The production manager advised him that some components can be bought from a supplier, which will spare capacity for the production of more clock radios. His company's information for the year ending 2020 is as follows: Cost of buying component C120 RM0.60 Cost of making component C120: Materials Labor RM0.45 RM0.20 Overheads RM0.10 Machine capacity is at an annual fixed cost of RM10,000. Advise BTS if component C120 should be manufacture or purchased.

BTS manufactures several components for a clock radio and assembles these parts as well. Recently, he noticed that the amount of time and resources spent on making those individual components is too much. The production manager advised him that some components can be bought from a supplier, which will spare capacity for the production of more clock radios. His company's information for the year ending 2020 is as follows: Cost of buying component C120 RM0.60 Cost of making component C120: Materials Labor RM0.45 RM0.20 Overheads RM0.10 Machine capacity is at an annual fixed cost of RM10,000. Advise BTS if component C120 should be manufacture or purchased.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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