Q11. | ||||||
Differential analyss | ||||||
Make | Buy | effect on Income | ||||
Material cost | 8680 | 0 | 8680 | |||
Labour cost | 10815 | 0 | 10815 | |||
variable overheads | 15400 | 0 | 15400 | |||
Fixed overheads | 9300 | 4743 | 4,557 | |||
Opportunity cost -Lease rental | 2400 | 0 | 2400 | |||
Cost of purchase | 0 | 43330 | -43330 | |||
Total | 46595 | 48073 | -1478 | |||
Answer is A. $1478 | ||||||
Q12. | ||||||
Fixed cost avoidable | 4557 | |||||
Opportunity cost | 2,400 | |||||
Total fixed cost | 6,957 | |||||
Divide: Difference in VC per unt | ||||||
VC of buying | 12.38 | |||||
VC of making | 9.97 | 2.41 | ||||
(2.48+3.09+4.40) | ||||||
Indifference production level | 2,887 | |||||
Answer is D. 2887 |
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