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plz answer this Suppose that Muscat company must decide whether to make or buy some of its parts for the final production. The costs of
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Suppose that Muscat company must decide whether to make or buy some of its parts for the final production. The costs of producing 30,000 part is RO 55,000 . The cost broken down as follows. DirectmaterialsDirectlaborRO30,000RO15,000VariablemanufacturingoverheadFixedmanufacturingoverheadRO6,000RO4,000 Instead of making the parts at an average cost per unit of RO 1.2 (RO 55,00030,000 ), the company has an opportunity to buy the dispensers at RO 1.1 per unit. If the dispensers are purchased, all variable costs and one-half of the fixed costs will be eliminated Step by Step Solution
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