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Make or Buy Decisions Analysis | Assignment

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Added on  2019-11-25

Make or Buy Decisions Analysis | Assignment

   Added on 2019-11-25

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RUNNING HEAD: MAKE OR BUY DECISIONSMAKE OR BUYPROBLEM ANALYSIS
Make or Buy Decisions Analysis | Assignment_1
1MAKE OR BUY DECISIONS IntroductionMake and buy decision is the one of the most crucial decisions a firm has to make in order to meet the demands of the market. The managers of the company have to make a decision as towhether to manufacture some products in house or to purchase them from the outside parties. This decision about manufacturing or buying a product requires a significant amount of information about the cost involved in the manufacturing and the purchasing of the product. Not only cost but the other relevant factors are also to be considered while taking buy and make decisions. The cost of making and buying the materials is identified using different techniques of cost management. Following is the analysis of the both the options available with the Play Dough Company.Solution:(a) Cost Per Unit Under Traditional Method :Statement of Producing 760000 CanistersParticularsAmountDirect Materials3,00,000.00 Direct Labour (Working Note 1)1,80,000.00 Variable Overhead (Working Note 2)1,20,000.00 Total Variable Cost6,00,000.00 Fixed Cost5,40,000.00 Total Product Cost11,40,000.00
Make or Buy Decisions Analysis | Assignment_2
2MAKE OR BUY DECISIONSStatement of Producing One CanisterParticularsAmountTotal Product Cost11,40,000.00 Total No. Of Products7,60,000.00 Cost per Product1.50
Make or Buy Decisions Analysis | Assignment_3

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