question archive RELEVANT COST FOR DECISION MAKING PT
RELEVANT COST FOR DECISION MAKING PT
Subject:AccountingPrice: Bought3
RELEVANT COST FOR DECISION MAKING
PT. Layang is a company that sells sneakers that has been in motion since 2007. The prime cost is $ 10 per unit and the conversion cost is $ 8 per unit. The cost of FOH is $ 4 per unit where the ratio between variable FOH and Fixed FOH is 3: 1. The company's fixed FOH consists of depreciation costs for buildings and machines. The production capacity of PT. Kites in one month are 20,000 sneakers. The company is currently getting an outside offer to produce sneakers for $ 13.2 per unit. The company will get a discount of $ 1 per unit if the company buys 20,000 sneakers at a time.
Requested:
Determine whether PT. Kites should either produce their own or take offers from outside parties!
