sir when calculating saving per limiting factor in a make vs. buy decision, should we club directly attributable fixed costs(with a unit/manufacturing dept.) with variable costs of manufacturing the units in-house and then deducting the total of these two with purchase price from outside supplier?
many thanks!
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Make Vs. Buy with limiting factor
5y ago#1The specifically attributable fixed costs will not be incurred if the product is bought externally as opposed to being made internally.
How exactly to deal with this depends on the wording of the question and what is required.
ya precisely my point, just like VCs would not be incurred if outsourced, specific FCs will also not incurred, so when finding savings per limiting factor or unit, we should club specific FCs with VCs, right sir?
Thanks for responding!
5y ago#3Correct :-)
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