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Zuestign No. 1. Standard costs and other data for two component types used by Waves electronics are preseniod below: In past years, Waves electronics has
Zuestign No. 1. Standard costs and other data for two component types used by Waves electronics are preseniod below: In past years, Waves electronics has manufactured all of its required components, however, in 2013 oaly 40,000 hours of otherwise idle machine nme can be devoted to the production of components. Accordingly, some of the component types must be purchased from outside suppliers. In producing various types, factory overhead is applied at Rs. 1.50 per standard machine hour. Fixed capacity costs, which will not be affecied by any make-or-buy decision, represent 40% of the applied factory overhead. The 40,000 hours of available machine time are to be scheduled, so that Waves realizes maximum potentinl cost savings. Required: (1) The relevant unit production costs to be considered in the make-or-buy decision to schedule machine time (2) The units of type 1 and Type 2 that Waves should produce if the allocation of machine time is based on potential cost savings per machine hour
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