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Make or buy bpp kit pg 38 num 122

This topic has 1 reply, 2 voices, and was last updated 8 months ago by John Moffat.

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May 21, 2022 at 9:40 am #656120
Shi2004
Participant
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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??
May 22, 2022 at 8:04 am #656162
John Moffat
Keymaster
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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.
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