4. AC Limited makes three components 1, 2 and 3. The following UNIT costs have been recorded:

1 2 3

Variable cost ()	5	7	10
Fixed cost ()	5	4	7
Total cost ()	10	11	17

Another company has offered to the components to AC Limited at the following prices:

Price each

Component 1 Component 2 Component 3

6 8 8

Which component(s), if any, should AC Limited consider buying in?

(a) buy in all three components

(b) do not buy any

(c) buy in 1 and 2

(d) buy in 3 only

5. The most relevant costs to be used in decision making are:

(a) costs already incurred which are known with certainty

(b) current costs

(c) estimated future costs

(d) notional costs