You are given the following data relating to bought-out prices and the cost of production of undernoted items. Prepare a suitable statement showing which items should be purchased from outside giving ranks in order of preference for buying, assuming (a) there is no constraint or key factor; (b) machine hours is a key factor; and (c) labour hours is a key factor.

Item A
Rs.

Item 8
Rs.

Item C
Rs.

Purchase price per unit

30

40

50

Variable cost per unit

18

48

34

Fixed cost per unit

6

10

14

Production per machine hour

1

2

1.50

Labour hours required per unit

2

1

4