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
Disadvantages of activity based costing 1) It is essentially not the panacea for all ills. 2) It absorbs a lot of resources. 3) Too much emphasis on customer viability c

BREAK EVEN ANALYSIS Break even analysis is mainly used to explain the relationship between the cost incurred, the volume operated at and the profit earned. To compute the breakev

literature review of effects of working capital on financial performance?

Budget Preparation The organization's budget is ready following the acceptance and sanction of the decision packages. Once the budget of organization has been accepted manager

What are the Principles of management accounting? 1. The procedures and methods to be followed for keeping and analyzing financial statements should have consistency. It enable

Marginal cost or incremental cost pricing method: Here the company may work on the premise of recovering its marginal cost and getting a contribution towards its overheads. Thi

Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

So as to makes sure that the receivables are collected in occupied and on due date by the customers, prior information of their credit worthiness must be obtainable. This informati

11.1 Process Solutions provides a computer-based document processing service. The accountant has produced the following analysis. Standard Modified Advanced Sales quantity 1,000

Cost oriental pricing policy Cost of production of a product is the most important variable and most important determinant of its price. There may type of costs such as-fixe