Question 5 De N Fresh Cafe prepares all kind of meals for breakfast, lunch, teatime, dinner and supper. The manager is considering whether to buy or make their own desert (Nata De Coco) which Ris to be served in all meals. Previously the Nata De Coco was purchased from an outside supplier for RM 900 per month. However, starting from next month the price of Nata De Coco is expected increase to RM 1,500. RARY'S The cost of making the Nata De Coco for a month is estimated to be: Direct materials RM 250 Variable overhead RM 200 Direct labour RM 300 Y'S COP The production of Nata De Coco requires 20 hours of a machine hour which is now fully utilized. If production of Nata De Coco is undertaken, production of Jelly would be reduced and resulting in a loss of revenue of RM520. The variable cost of producing Jelly is RM260 Required: (a) Explain with computation whether the manager should decide to buy or make the Nata De Coco. RY'S COP (10 marks) COPY (b) Discuss TWO (2) factors to be considered in make or buy decision. LIBRA ARY'S (4 marks) (c) As a Management Accountant, briefly explain the best decision (s) that you should contribute to your company. (6 marks)