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Make or Buy Decision

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Make or Buy Decision

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by AvatarJohn Moffat.
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  • October 1, 2020 at 6:53 am #587092
    AvatarNikitagarwal
    Participant
    • Topics: 154
    • Replies: 147
    • ☆☆☆

    Robber Co manufactures control panels for burglar alarms, a very profitable product. Every product comes with a one-year warranty offering free repairs if any faults arise in this period.
    my question – While calculating Machine set-up cost they have done 500/400 instead it should be 400/500 ..
    please correct if I am wrong.

    October 1, 2020 at 10:03 am #587113
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54838
    • ☆☆☆☆☆

    The answer is correct.

    Changing to a smaller batch size means that they will have to produce more batches to produce the same total quantity.

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