The Modern Software Company, Bangalore, finds that while it costs Rs. 67.50 each to make a component of Pen-Drive, the same is available in the market at Rs. 57.50 each with the assurance of a continued supply. The break-down of cost is as follows:
|
Rs / Each |
|
|
Materials |
27.50 |
|
Labour |
17.50 |
|
Other variable costs |
5.00 |
|
Fixed cost |
12.50 |
- Should you make or buy?
- What would be your decision if the supplier offered at Rs. 45.50 each?