PART 1. MAKE OR BUY - PROBLEM SOLVING AND EVALUATION (30 Marks)

Direction: Answer all questions: Show your solutions and discuss your recommendation concisely, if required.

1. Dell manufactures and sells Mobiles. Recently a supplier has offered the computers of the same quality @ BD 20 each with an assurance of continued supply. The following is the budget for 3000 units prepared for the quarter ending June 2020:

Particulars	AMOUNT (BD)
Raw Material Cost	19000
Direct Wages	17000
Production Overheads
Variable	11300
Fixed	13700
Distribution Costs
Variable	5800
Fixed	7200
Administration Costs
Variable	4970
Fixed	11900

Required:

1. Should Dell Manufactures accept the offer from the supplier? (Marking Scheme: Computation: 6 Marks, Correct answer: 4 Marks, Total: 10 Marks)

2. What would be the decision if the supplier offered the tables at BD16 each and calculate for 3500 Units? (Marking Scheme: Computation: 6 Marks, Correct answer: 4 Marks, Total: 10 Marks)

2. Ahmed WLL is selling automobile spare parts. The demand for a car wheel cover is at the rate of 5550 per year and this demand is going to continue for next two years. The company is decising wether to buy it from outside or manufacture it. If it buys from outside it will costs the company BD2.4 per unit. If it produces the fixed cost will be BD 9,900 and variable cost of BD 1.3 per unit. As the production manager of Ahmed WLL should your company manufacture or buy the wheel cover from outside. ? (Marking Scheme: Computation: 8 Marks, Correct answer: 2 Marks, Total: 10 Marks).