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Mark Obtained 2.1 Yoga, an exercise equipment producer, needs to determine whether it would be cheaper to make its own mats or to purchase mats
Mark Obtained 2.1 Yoga, an exercise equipment producer, needs to determine whether it would be cheaper to make its own mats or to purchase mats from Mikro. Yoga requires 5 000 mats per month. Mikro will charge R100 per mat. Cost information on internal production of 5 000 mats is as follows: R 25.00 Direct Materials Direct Labour Manufacturing Overhead Variable Fixed R 40 R 15 R 50 000 40% of fixed overhead can be avoided if the mats are purchased externally. REQUIRED: Determine which alternative would be more cost effective and by how much
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