Question: Pioner limited makes four component A, B, C and D for which cost in the forthcoming year are expected to be as follows: A B C D Production (units) 22,000 16,000 26,000 18,000 Rupees per unit Direct material 32 28 36 40 Direct labour 30 28 32 28 Variable Overhead 6 8 4 4 68 64 72 72 A sub-contractor has offered to supply units of A, B, C and D for Rs. 75, Rs. 71, Rs. 73 and Rs. 65 respectively. Required: Which product should buy or make.
Question: Pioner limited makes four component A, B, C and D for which cost in the forthcoming year are expected to be as follows: A B C D Production (units) 22,000 16,000 26,000 18,000 Rupees per unit Direct material 32 28 36 40 Direct labour 30 28 32 28 Variable Overhead 6 8 4 4 68 64 72 72 A sub-contractor has offered to supply units of A, B, C and D for Rs. 75, Rs. 71, Rs. 73 and Rs. 65 respectively. Required: Which product should buy or make.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question: Pioner limited makes four component A, B, C and D for which cost in the forthcoming year are expected to be as follows:
|
A |
B |
C |
D |
|
|
Production (units) |
22,000 |
16,000 |
26,000 |
18,000 |
|
Rupees per unit |
||||
|
Direct material |
32 |
28 |
36 |
40 |
|
Direct labour |
30 |
28 |
32 |
28 |
|
Variable |
6 |
8 |
4 |
4 |
|
68 |
64 |
72 |
72 |
A sub-contractor has offered to supply units of A, B, C and D for Rs. 75, Rs. 71, Rs. 73 and Rs. 65 respectively.
Required:
Which product should buy or make.
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