Top Designs Ltd currently design and manufacture a range of high quality safety gear of their...
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Top Designs Ltd currently design and manufacture a range of high quality safety gear of their own. The cost details for their latest safety gear are shown below: Direct Materials Direct Labour Variable Overhead Fixed Overhead Total Manufacturing Cost $2,200,000 $450,000 $600,000 $750,000 $4,000,000 Quantity Produced Cost Per Unit An overseas manufacturer has offered to supply a similar safety gear for $425 per unit. 8,000 units $500 Required 1. Should Top Designs Ltd make or buy their safety gear? Show all calculations for total cost method. (3 marks) 2. What other factors should be taken into consideration? (2 marks) Top Designs Ltd currently design and manufacture a range of high quality safety gear of their own. The cost details for their latest safety gear are shown below: Direct Materials Direct Labour Variable Overhead Fixed Overhead Total Manufacturing Cost $2,200,000 $450,000 $600,000 $750,000 $4,000,000 Quantity Produced Cost Per Unit An overseas manufacturer has offered to supply a similar safety gear for $425 per unit. 8,000 units $500 Required 1. Should Top Designs Ltd make or buy their safety gear? Show all calculations for total cost method. (3 marks) 2. What other factors should be taken into consideration? (2 marks)
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Answer rating: 100% (QA)
1 To determine whether Top Designs Ltd should make or buy their safety gear we need to compare the total cost of producing the gear inhouse to the cos... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
Posted Date:
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