Question
A car manufacturing facility compares the manufacture of a hood internally rather than buying it from abroad at a price of SR 800. Direct materials
A car manufacturing facility compares the manufacture of a hood internally rather than buying it from abroad at a price of SR 800.
Direct materials for unit 240 SR, direct work of the unit 150 SR, variable industrial costs of the unit 100 SR, purchase of equipment worth 750,000 SR perished on the basis of fixed depreciation within 5 years, annual consumption of unused energy that will be used in the manufacture of cover 80,000 SR, annual increase in administrative costs as a result of industrialization internally 150,000 SR. The projected annual production is 1,000 units and the facility's cover needs are sufficient during the year.
Required:
- Does the company recommend manufacturing the cover internally or buying it from abroad?
- The same previous question assuming that the cover supplier grants a 2% discount if purchases are 1000 units per year.
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