MAKE OR BUY DECISION

QUESHON 2 Trendsetter Enterprise is an apparel manufacturer. Their new Earthguardiens Collection includes eoo-friendly materials that can keep those who wear feels comfortable and protected in any environment. The eon-friendly materials are known as 'Secret1'. The following information is the cost of making Secreti: Per unlt [RM] Direct materials 15.00 Direct labour 12.00 Variable manufacturing overhead 4.00 *Supervisor salaries 30.00 Depreciation of special equipment 4.00 Other xed manufacturing overhead 9.00 Total cost or Secret1 T I10% of the supervisor salaries is the commission paid base on unit of production. Due to the large cost of producing Secret1. the top management ls thinking of buying Secreti from a supplier. Trendsetter has received two quotations trorn Thailand and a Vietnam supplier. Both suppliers offer to sell 15,000 units Secret1 at a price of RM40 and RMSE respectively. However. the price does not include inport duty. Trendsetter needs to pay another 5% of the purchasing cost for the import duty charge1 either from the Thailand or Vietnam supplier.