- This topic has 1 reply, 2 voices, and was last updated 9 years ago by
.
- Posts
hello sir.
P/r Kit .
116-120 Pxie PharmaThey giving fixed cost per unit and variable cost per unit + imported price.
Question:
What saving (increased cost) per unit would be made(incured) if Faryoxide was purchased from the overseas producer. (imp price)
My question is: Why we dont consider the saving of Fixed costs? Even if we considering our decision before Fixed costs incured. Considering Only VC-Imp price.
Or its about Irrelevant sunk cost of fixed costs? Confused sir.Total fixed costs for the whole company will not change (by definition) regardless of what is produced. The only time they will change is if you are told that any of the fixed costs are specifically attributable to a particular product – only then will those fixed costs be saved if that product is not produced.
I suggest that you watch my lectures on short-term decision making. The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
- The topic ‘Make or buy decisions’ is closed to new replies.