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Hello sir i have a question on the make or buy. I know how to do the calculations but i don’t understand the explanation provided in the book. I Don’t understand why the answer is B ( 4000 unit of Y and 4000 unit of Z) can you please explain??
The problem is that the directly attributable fixed costs are only saved if they make none of the particular product. So even if they were just making only 1 of a particular product, they would then incur all of the directly attributable fixed costs for that product.