Make or buy decision

Dear John,

I hope you are well

Im hoping you can advise me on variable cost query.

I was working through my bpp practice & revision kit and cannot understand why when calculating the cost of making, Heating and Power costs as well as machine costs were not included in the calculation.

H&P costs in the question it includes an apportionment which understandably should be excluded. But I don’t understand why the none apportioned directly incurred as production of items were not included?

Also with Machine costs – semi variable, my understanding is that only the Fixed costs which were identified should have been excluded?

I hope my explanation makes sense and you might be able to explain why this is the case?
Please let me know if I am not making sense and I will type in full extract.

Many thanks