Question: Q3 Determine which decision is profitable for the company using Make or Buy concept for the scenario in Figure Q3. Cerberus Berhad is a company

Q3 Determine which decision is profitable for the

Q3 Determine which decision is profitable for the company using Make or Buy concept for the scenario in Figure Q3. Cerberus Berhad is a company that has been involved in many projects. Currently, one project for Cerberus Berhad requires cost about RM1000 to buy each machinery. However, the company also has extra capacity that can be used to produce the same. The annual fixed cost of the unused capacity is RM2,000,000. If Cerberus Berhad decided to make the product it would incur material cost of RM400 per unit, labour cost of RM250 per unit and variable overhead cost of RM200 per unit. The future demand is estimated as 5000 units. Figure Q3

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