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    Ass 4 - Make or Buy

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    Jorni
    The document contains calculations of direct material costs, direct labor costs, variable overhead costs, total benefits, and costs of purchasing units from another manufacturer for multiple exercises. It compares the total benefits of making units to the total costs of outsourcing production. If benefits exceed costs, it indicates making the units is best. If costs are greater, it recommends outsourcing production.

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    Ass 4 - Make or Buy

    Uploaded by

    Jorni
    14 views9 pages
    The document contains calculations of direct material costs, direct labor costs, variable overhead costs, total benefits, and costs of purchasing units from another manufacturer for multiple exercises. It compares the total benefits of making units to the total costs of outsourcing production. If benefits exceed costs, it indicates making the units is best. If costs are greater, it recommends outsourcing production.

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    ASS 4_MAKE OR BUY

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    The document contains calculations of direct material costs, direct labor costs, variable overhead costs, total benefits, and costs of purchasing units from another manufacturer for multiple exercises. It compares the total benefits of making units to the total costs of outsourcing production. If benefits exceed costs, it indicates making the units is best. If costs are greater, it recommends outsourcing production.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    14 views9 pages

    Ass 4 - Make or Buy

    Uploaded by

    Jorni
    The document contains calculations of direct material costs, direct labor costs, variable overhead costs, total benefits, and costs of purchasing units from another manufacturer for multiple exercises. It compares the total benefits of making units to the total costs of outsourcing production. If benefits exceed costs, it indicates making the units is best. If costs are greater, it recommends outsourcing production.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 9

    BRIEF EXERCISE - 2

    DIRECT MATERIAL ₹ 600.00


    DIRECT LABOR ₹ 750.00
    VARIABLE OVERHEAD ₹ 1,000.00
    TOTAL BENEFIT ₹ 2,350.00
    COST OF PURCHASING OF 1 UNIT FROM ANOTHER MANUFACTURER
    TOTAL COST INCURRED FOR 1000 UNITS

    BENEFIT-COST=POSITIVE OR NEGATIVE
    #VALUE!
    ₹ 2,500.00
    ₹ 2,500,000.00

    NEGATIVE SO MAKE OPTION IS BEST


    EXERCISE-10
    QUANTITY
    COST OF PURCHASING OUTSIDE

    EXERCISE-11

    DIRECT MATERIAL
    DIRECT LABOR
    VARIABLE OVERHEAD
    TOTAL BENEFIT

    EXERCISE-12
    TOTAL LABOUR COST FOR MAINTENANCE DEPARTMENT
    COST INCURRED FOR OUTSOURCING LABOUR MAINTENANCE
    BENEFIT-COST
    OUTSOUCING IS BEST

    EXERCISE-13
    TOTAL LABOUR COST FOR MAINTENANCE DEPARTMENT
    COST INCURRED FOR OUTSOURCING LABOUR MAINTENANCE
    BENEFIT-COST
    OUTSOUCING IS BEST
    10000 BENEFIT
    ₹ 5,500,000.00 DIRECT MATERIAL
    DIRECT LABOUR
    VARIABLE OVERHEAD
    SUPERVISOR COST
    TOTAL BENEFIT

    ₹ 750.00
    ₹ 900.00
    ₹ 1,150.00
    ₹ 2,800.00 ₹ 2,800,000.00

    ₹ 7,500,000.00 BENEFIT
    ₹ 6,250,000.00 COST
    ₹ 1,250,000.00

    ₹ 10,000,000.00 BENEFIT
    ₹ 7,500,000.00 COST
    ₹ 2,500,000.00
    PER UNIT TOTAL
    ₹ 150.00 ₹ 1,500,000.00
    ₹ 150.00 ₹ 1,500,000.00
    ₹ 100.00 ₹ 1,000,000.00
    ₹ 1,600,000.00
    ₹ 5,600,000.00

    COST OF PURCHASING OF 1 UNIT FROM ANOTHER MANUFACTURER ₹ 3,000.00


    TOTAL COST INCURRED FOR 1000 UNITS ₹ 3,000,000.00

    BENEFIT-COST=POSITIVE OR NEGATIVE
    -₹ 200,000.00 NEGATIVE SO MAKE OPTION IS
    BENEFIT-COST ₹ 100,000.00
    BUY OPTION IS BEST

    GATIVE SO MAKE OPTION IS BEST

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