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Problem 10.5 (Make or Buy). ABC Ltd. produces a variety of products each having a number of component parts. Product B takes 5 hours to
Problem 10.5 (Make or Buy). ABC Ltd. produces a variety of products each having a number of component parts. Product B takes 5 hours to produce on a particular machine which is working at full capacity. B has a selling price of Rs. 100 and variable cost of Rs. 60 per unit. A component part X-100 could be made on the same machine in two hours at a variable cost of Rs. 10 per unit. The suppliers price for the component is Rs. 25 per unit. Required: Advice whether the company should buy the component X-100 (If necessary make suitable assumptions)
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