Q 72

Special cotract requires 100 hours

each hour paid 15$

100*15 1500

if the laour hours take from cotract z it attract 1000$ pealty for delay ecause it is due to special cotract

so total relevat cost of laour 2500

Q 74

TRM 2000kg
out of stock 12000
c.pp 8$

1200*8 9600

I stock which is readily availale i market to acquire ad it is regularly used I product L so it eed to e replaced

r.c 800*8 6400

16000

q 75

I case of modificatio cost to use as a sustitute

cost of sustitute material pp of sustitute material- modificatio cost

I case of q 75

material h I stock 3700 kg it ca e sold for 3.2 per kg or ca use as a sustitute to material through modificatio at 3.7 per kg

so et eefit through modificatio ad sustitutio

op cost 3.8 per kg for material h

relevat cost 3700 *3.8 plus 500*6.3 17210

q 71
10*4 40

xl polymers

relevat cost of r1 (raw material) d.c expected 1250 ad o other use of it. If it is used I at idustrie

r.c 1250

relevat cost of laour for completig the jo it requires 250 of g1 ad 100 hr of g2

curretly employees paid guarateed paymet for their work 150 hr ad 200 hr respectively

relevat cost of idle time 0

additioal hours 100*15 1500 630/42

m.p to e caughted 250

153
t co ca either purchase ew swipe 2 or modify existig swipe 1 to swipe 2

optio
purchase of ew swipe 2 10800

or optio 2

modificatio 4600 plus

loss of scrap value 3000

7600

r.c 7600

251

relevat cost of upholstery faric

purchase price per m2 85

total purchase price 85*20 1700

trasportatio cost 20*7.5 150

1850

Total required teak wood 10m2

I stock teak wood 5m2

out of stock it eed to e purchased at c.mp to e staied ta colour ad to use iti I refurishmet

r.c per m2 110

p.p 110
staiig 4.5
114.5
if we use old teak from ivetory r.c

opportuity cost o r.p 100-100*5% 95

sadig cost 14
staiig cost 4.5
113.5

so it is etter to use old teak istead upto 5 m2

r.c of teak wood to e used I ow

old teak 567.5 113.5*5

ew teak 572.5 114.5*5
s.m 80 give

1220

I case of skiled laour co has two optio

take employees from other works which ears 6$ cotriujtio
hourly rate to employee 25. total relevat cost 25*100Plus 6*100

hire ew skilled workers ad give traiig for 1st 10 hr @14

relevat cost of skillec laour lower of oth optio

uskilled laour

imp

each of the 5 workers guarateed with the pay 20 per week it is committed cost ot relevat

total hours committed 420/12 35 hours

curretly egaged 372/12 31

idle hr per employee 4 hours

total idle hr for 5 workers 5*4 20
total required uskilled hours 56
alace hr 36
total uskilled hr pa 18*36 648

variale overhead ca e cosidered as relevat as it is icreametal to a decisio

relevat cost of geeral purpose equipmet resale value after the cotract period if ot used

compay has alorry r.v 25 lakh

r.v after 2 year expected if ot used 22 lakh

r.v after 2 year if it is used for the cotract 17 lakh

loss of value due to passage of time 25-22 3

which is irrelevat

relevat loss of value which is due to the work or cotract

22-17 5

if the mp is lower tha price quoted y the customer the special order should ot e accepted

accept or reject-activity 6
illustratio 1 mp
activity 3
activity 2
activity 1

make or uy

cost of make of 10000 uits for ext year

DM 75000 37500
laour 65000 32500
v.o 55000 27500
specific f.c 35000 35000
total cost of make
230000 132500

cost of uy of 10000 uits

25*10000 250000 125000

recommed:make

what will e your aswer if expected output is 5000 uits u

we should uy the product as cost of uy is 125000

idifferece poit :it is the output level at which total cost of oth optios are same ad the decisio maker is idifferet(cofus

idifferet poit output diff I f.c / diff I v.c

I the aove case I differece poit will e

diff I f.c
35000/5.5 6363.63

calculate total cost of uy ad make if output is 6363.63

uy 159091
make 159091

if the expected output is higher tha I diff poit output - lower variale cost optio is preferale ormally make
if the expected output is lower tha I diff poit output -higher variale cost optio is preferale ormally uy is p
at idiff poit either of the optio is preferale
what will e your aswer space used for lade productio ca e leased for 45000 per year if the productio ceas

output level 10000 uits

cost of make 10000 uits

dm 75000
dl 65000
vo 55000
f. supervisio cost 35000
230000

cost of uy

total cost 250000

less:ret for let out -45000
205000

recommed: uy

calculatio of cost of make- roer c.o

particulars keypad d.sc

Dm- ote1 164000 118320
DL 40000 60000
heat ad power cost- ote 2 44000 58000
machie-ote3 31500 36000
dep ad is cost 33600 38400
total cost 313100 310720
cost of make per uit 3.91375 3884
cost of uy(epp) 4.1 4.3
decisio make make

ote 1:dm keypad d.sc

curret cost 160000 116000
expected hike 5% I 6m 2% imm
expected cost 164000 118320

heat ad power cost

keypad d.sc
total cost 64000 88000
less:g f.c -20000 -30000
specific heat power cost 44000 58000
machie cost- ote 3
keypad d.sc
total cost 26000 30000
less:f.c 4000 6000
v.c 22000 24000

o of uits I atches 500 500

o of atches I total 160 160
v.c per atch 137.5 150

o of atches proposed 200 200 80000/400

v.c expected 27500 30000

total machie cost(icludig fixed cost) 31500 36000

 e replaced

rial- modificatio cost

modificatio at 3.7 per kg

use of it. If it is used I at idustries we will save 1250

15 15*100
 retaier ship fee paid to shippig compay 400 per moth ecause it is committed I ature

25*100Plus 6*100 3100

100*25plus 10*14 2640

cotract period if ot used r.v a cp it used
decisio maker is idifferet(cofused) o selectio of est optio

ptio is preferale ormally make is preferale

ptio is preferale ormally uy is preferale
0 per year if the productio ceases
80000/400