[aisha4897]

Thank you so much sir, I now understand it Alhumdulillah!! How did the answer come to be $15.5?? Is it by adding $3 of direct material, $1 of variable O/H and $2.5 of specific fixed cost to the $9 that you had found earlier??

Sorry but I haven’t come across a question like this in my BPP kit so it’s confusing as there’s relevant costing+make or buy decision in it. In my BPP textbook on page 170, it’s written that the relevant costs are the differeriant costs between making and buying, so to my understanding, if the unit variable cost of making is 14 and the unit variable cost of buying is 12 then the relevant cost is 2 in this case??

[aisha4897]

Apologies sir but I still don’t understand why we are dividing 10 by 2 🙁

[Author]

Posts