The estimated costs of producing 10,000 units of a component NBH are: Direct material Direct labour...

 

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The estimated costs of producing 10,000 units of a component NBH are: Direct material Direct labour Variable factory overheads Cost per unit (RM) 15 9 7 31 Total (RM) 150,000 90,000 70,000 310,000 The same component can be purchased from the open market at a price of RM29 per unit. Machine capacity is at an annual fixed cost of RM15,000 Required: Advise the company on whether to make or buy component NBH. The estimated costs of producing 10,000 units of a component NBH are: Direct material Direct labour Variable factory overheads Cost per unit (RM) 15 9 7 31 Total (RM) 150,000 90,000 70,000 310,000 The same component can be purchased from the open market at a price of RM29 per unit. Machine capacity is at an annual fixed cost of RM15,000 Required: Advise the company on whether to make or buy component NBH.

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