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Linda Manufacturing Sdn Bhd (LMSB) uses a componentX in its products. To make the component internally would take 5 hours and wouldinvolve a variablecost of
Linda Manufacturing Sdn Bhd (LMSB) uses a componentX in its products. To make the component internally would take 5 hours and wouldinvolve a variablecost of RM15. To manufacture the component would involve work on a machine that is being used to make product Y. The product takes 1 hour to make and its variablecost is RM5.The product's selling price is RM8.An outside supplier has offered to supply the component X at RM20 each. Should LMSB make or buy the component?
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