Decision of Making or Buying: When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier. In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

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Answer 1

Question

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

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Answer 2

Question

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Answer 6

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Answer 7

Chapter 11, Problem 9F15

To determine

Decision of Making or Buying:

When a company takes decision, whether to manufacture a component internally or buy from outside it is called make or buy decision. While taking the decision, the variable costs of manufacturing the product is compared with the purchase price of the product when bought from the outside supplier.

In relevant costing, the decision to make or buy a product component depends upon the analysis of costs. Avoidable fixed costs and opportunity costs are also considered in the analysis

The financial advantage or (Disadvantage) of buying 80,000 units of Alpha form supplier instead of making

Answer 8

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Answer 9

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Answer 11

Ch. 11 - What is a relevant cost?Ch. 11 - Define the following terms: incremental cost,...Ch. 11 - Are variable costs always relevant costs? Explain.Ch. 11 - Prob. 4Q Ch. 11 - “Variable costs and differential costs mean the...Ch. 11 - Prob. 6Q Ch. 11 - Prentice Company is considering dropping one of...Ch. 11 - Prob. 8Q Ch. 11 - What is the danger in allocating common fixed...Ch. 11 - Prob. 10Q

Solution Summary: The author explains that the decision of making or buying a product depends upon the analysis of costs.

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