Question
QUESTION 1 Electroexperts Sdn Bhd has received a special marketing choice from one of the world's electronic suppliers. The suppliers want to sell to Electroexperts
QUESTION 1 Electroexperts Sdn Bhd has received a special marketing choice from one of the world's electronic suppliers. The suppliers want to sell to Electroexperts a certain electronic component for RM18 per unit. Currently Electroexperts makes the part and its management is seriously considering the buying choice. Table 1 Unit manufactured Direct materials cost Direct labor cost Fixed costs Variable costs 6,000 RM36,000 RM48,000 RM20,000 RM10,000 (a) If Electroexperts buys the part, its fixed costs will reduce by 10% and the variable costs will be scrapped off. Perform incremental analysis and determine whether Electroexperts should buy the part or continue making the part? (10 markS (b) If Electroexperts buys the part, its fixed costs will reduce by 90% and the variable costs will reduce by 95%. Perform incremental analysis and determine whether Electroexperts should buy the part or continue making the part? (10 marks)
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