PLZ PLZ HELP

1. Ali and Johan are best friends who used their savings and all the monetary gifts they received during graduation to start their own business manufacturing different kinds of facemasks, given the high demand. We dont need a product costing system. We are a small manufacturer with a just in time approach so our inventories are minimal. We have no influence over the product price; whatever the big manufacturers do, we follow. Our accountant only comes in during Fridays and she is already far too busy to bother with a product costing system. Is this a reasonable attitude? Explain why. (5 marks)

1. Harrys Pies currently makes the crust in-house for the various pies it sells at its stores. It uses 60,000 crusts annually in the production of its bestselling pies. The costs to make the crusts are:

   Materials	$ 0.23 per crust
   Labour	$ 0.35 per crust
   Variable Overhead	$ 0.25 per crust
   Fixed Overhead	$ 0.27 per crust

   A nearby bakery has offered to sell the crusts for $0.85 each to Harrys Pies. If the crusts are purchased, 30% of the fixed overhead could be avoided.

2. Calculate the relevant costs for Harrys Pies if it continues to make its own pies. (2 marks)
3. Calculate the relevant costs for Harrys Pies if it purchases from the nearby bakery. (2 marks)
4. If Harrys Pies accepts the offer, calculate the effect on profit. (2 marks)
5. Should Harrys Pies accept or reject the bakerys offer? (1 mark)