A Ltd. produces a variety of products, each having a number of components parts. Component B has a selling price of Rs.50 and a marginal cost of Rs.30 per unit. It takes 5 hours to process on machine working to full capacity. Component A –20 used for Product A could be made on the same machine in 2 hours for a marginal cost of Rs.5 per unit. The supplier’s price is Rs.12.50. Should A Ltd. make or buy component A-20?

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