YJM Energy Bhd is well known electronic game manufacturer. Two of its famous electronic games manufactures is known as Mario Super Fight (MSF) and XX Racing (XXR). These two games required a special machine to be produced.

So, before proceed to manufacture internally, production manager has made budgeted cost and out of the overhead shown below 45% is variable in nature.

	(MSF)	(XXR)
Units	10,000	20,000
Direct material	103,000	162,000
Direct Labour	48,000	70,200
Overhead	91,000	125,000

But, recently, production manager just heard from one of their supplier that they also supplier the same games which have same specifications as MSF and XXR. Now, production manager in the middle of discussion whether to manufactures internally or buy both games from the supplier.

If YJM Energy Sdn Bhd proceed to order from supplier they need to incur a quality control cost amounting RM4.50 for both games. The price offer by the supplier for MSF is RM17 and for XXR is RM11.

Required:

a. Determine the total relevant cost of making and the total relevant cost of buying for each of the games.

(10 marks)

b. Based on your answer in part (a) above, suggest to the management of the company whether it should make or buy each of the games.

(2 marks)