Make or buy decisions under limiting factors, Managerial Accounting

MAKE OR BUY DECISIONS UNDER LIMITING FACTORS

One reason for buying products/services from another organisation is the scarcity of resources, so that the company may be unable to make all its components. In such a case the company should combine internal resources with buying externally to increase profitability. In situations where a company must sub-contract work to make up short fall in its in-house capability, then its cost will be minimized where the marginal cost of buying is least for each unit of scarce resource saved by buying externally.

Posted Date: 12/5/2012 7:45:15 AM | Location : United States







Related Discussions:- Make or buy decisions under limiting factors, Assignment Help, Ask Question on Make or buy decisions under limiting factors, Get Answer, Expert's Help, Make or buy decisions under limiting factors Discussions

Write discussion on Make or buy decisions under limiting factors
Your posts are moderated
Related Questions
Manufacturing cost data for Sassafras Company, which uses a job order cost system, are presented below. Indicate the missing amount for each letter. Assume that in all cases manufa

Ask queThe standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticip

Procedure of material acquisition A stores record is maintained into which the quantity and value of materials received is entered. Issues of materials to production are made b

What the traffic can bear pricing Pricing based on what the traffic can bear is not a sophisticated method. It is used by retail traders as well as by some manufacturing firms.

VALUE CHAIN ANALYSIS Every firm is a collection of activities that are executed to design, generate, market, deliver and support its products or services. Value chain analysis

Time sheets are collected in a batch, and the information is manually keyed into the system. This data is now stored on a magnetic disk. An editing program is run, which verifies w

Find the value of the following: a.    If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b.    If the capital of propriet

Game Theory Game theory was developed for the purpose of analyzing competitive situation involving conflicting interests. In game theory, there are assumed to be two or more pe

Cyclic Chains: In Markov Chains the current state of the system depends on all previous states. It is a stochastic process.  Sometimes transition probability matrices are diff

Select Appropriate Alternative Courses of Action In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which