A company which manufactures four components (A, B, C and D), using the same skilled labour, aims to maximize its profits. The following information is available:

As it has insufficient skilled labour hours available to manufacture all the components required, the company will need to buy some units of one component from the other supplier.

Which component should be purchased from the other supplier?
(a)
(b)
(c)
(d)
Component A Component B Component C Component D (2 marks)
ACCA - Financial Information for Management

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Variable production cost per unit () Purchase price per unit from another supplier () Skilled labour hours per unit to manufacture Component A B C D 60 70 75 85 108 130 120 124 4 6 5 3