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Shellfish Co makes four components, W, X, Y and Z, for which costs in the forthcoming year are expected to be as follows. X
Shellfish Co makes four components, W, X, Y and Z, for which costs in the forthcoming year are expected to be as follows. X Y 2 Production (units) 1,000 2.000 4,000 3,000 Unit marginal costs $ $ $ $ Direct materials Direct labour 8 9 622|| 37 21 Variable production overheads Directly attributable fixed costs per annum and committed fixed costs: S Incurred as a direct consequence of making W 1,000 Incurred as a direct consequence of making X 5.000 Incurred as a direct consequence of making Y 6,000 Incurred as a direct consequence of making Z 8.000 Other fixed costs (committed) 30.000 50.000 A sub-contractor has offered to supply units of W, X, Y and Z for $12, $21, $10 and $14 respectively. Should Shellfish make or buy the components?
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