ACCA F5 Make or Buy decisions
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sir, joint processing costs in relevant costing is important for the exam?
The joint costing from Paper F2 is possible, but very unlikely.
Thanks for the information! 馃檪
You are welcome 馃檪
It seems correct 馃檪
Many thanks sir. 馃檪
You are welcome 馃檪
Doesn’t putting x second cost less:
Example Y,X,Z
For Y: 2500*2*12 = $60,000
For X: 1000*3*10 = $30,000
1000*3*13 = $39,000
For Z = 4000*16 = $64,000
Y,X,Z Total Cost = $193,000
Y,Z,X Total Cost = $196,000
Why not just rank them in order of savings as shown in the above Y,X,Z example?
Shouldn’t the units of X = to 6000 ?
There also decisions whether to outsource or not a particular department…… Here in make or buy decision we did question regarding whether we should manufacture a particular product or buy it from others. What about whether to outsource a particular dept or not????
But is exactly the same logic and understanding and doesn’t require any extra learning.
KRS Ltd is considering whether to administer its own purchase ledger or
to use an external accounting service. It has obtained the following cost
estimates for each option:
Internal service department:
Determine the cost effectiveness of outsourcing the accounting
activities and identify the broad qualitative factors involved.
Volume
Purchase hardware/software $320 pa
Hardware/software maintenance $750 pa
Accounting stationary $500 pa
Parttime
account clerk $6,000 pa VOLUME:
External services:
Processing of invoices/credit notes $0.50 per document 5,000 pa
Processing of cheque payments $0.50 per cheque 4,000 pa
Reconciling supplier accounts $2.00 per supplier
per month 150 suppliers
BUT THIS QUESTION DOESNT LOOK SIMILAR TO ME AT ALL????????????
SORRY IN ADVANCE FOR NOT POSTING IT IN ASK TUTOR FORUM AS ITS RELATED TO OUR CONVERSATION GOING CURRENTLY ON COMMENTS
THIS LINE SHOULD BE AT THE END OF QUESTION BUT DUE TO MY MISTAKE ITS AT TOP
“Determine the cost effectiveness of outsourcing the accounting
activities and identify the broad qualitative factors involved.
Volume”
Arent there any lectures on outsourcing?????
Make or buy is outsourcing!
No other lectures are needed.