1. The internal manufacturing cost per unit of a component is as follows -

Direct Material$5.00

Direct Labour$10.00

Fixed costs$15.00

Total costs$30.00

(a)Given the information above, if the company buys the component, it would however have to pay $17.00, but would still have to meet its fixed cost. Should the company make or buy the component?

(b)Based on your answer in (a) above name two factors that can influence the company to buy the product.

2.(a) Describe two (2) methods for allocating support costs to departments.

(b) Explain why support costs are allocated to departments.