Now assume that Shah Ltd has no spare capacity, so it can only produce the component internally
Question:
Now assume that Shah Ltd has no spare capacity, so it can only produce the component internally by reducing its output of another of its products. While it is making each component, it will lose contributions of £12 from the other product.
Should the component be subcontracted or produced internally?
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The answer is to subcontract In this case both the variable cost ...View the full answer
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Related Book For
Accounting And Finance For Non-Specialists
ISBN: 9781292244013
11th Edition
Authors: Eddie McLaney, Peter Atrill
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