Following information relates to Coromandal Co., Ltd., which produces washing machines.

Cost (per unit) Material Rs. 50,
Labour Rs. 25,
Direct Expenses Rs. 15,
Fixed Expenses Rs. 10,
Profit Rs. 20,
Selling Price Rs. 120.
The production capacity of the factory is 10,000 units. At present, a supplier has offered to sell the same item for Rs. 95. Should the company produce the item or buy it from the supplier ? Give reasons.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Solution The company shou... View the full answer