5 Question 3 (Marks:20) Company A produces a component used in the production of one of the company's main products. The costs are budgeted as follows: Amount per unit (R) Amount per 5 000 units (R) Materials 25 000 Labour 75 000 Variable overhead 50 000 Depreciation 20 000 Allocated general overhead 60 000 Total cost 230 000 15 10 12 46 The components can be purchased from an outside supplier at a cost of R35 per unit. Required: 2.3.1 Determine whether the company should make or buy the component. In arriving at (7) your solution clearly show all your workings, as marks will be allocated. 2.3.2 State five qualitative aspects that the company must evaluate before making a (5) decision in Q.3.1 above. Q.3.3 Briefly explain the difference between avoidable costs, differential costs and (6) opportunity costs. Provide one example of each cost. 2.3.4 List two examples of scenarios where relevant costing can be used effectively in (2) decision-making END OF PAPER