MAKE OR BUY DECISION (RELEVANT COSTING)

[@khandynourijkamouelle9760]

Very very good Thank you God bless 🇨🇲

[@georgesaccountingtutorials]

You are welcome.

[@jameskhamis3569]

Thank you very much . I have benefited alot from your lectures . Am. Student in the university of juba in school of management . God bless you.

[@georgeadjei2840]

You are most welcome, James.

[@paultiyanjanemaxwell9847]

I have an exam tomorrow, this has helped

[@charlesamofa5826]

i;m very much informed. thank you bro

[@sureshkutty9045]

Tq bro 👍 I am form Tamilnadu

[@saidosman1527]

Gracias

[@kozibamasole3596]

Thank you very much 🙏.. I have been struggling with this..

[@remedialflawlesstunes1990]

Thank you so much Sir 🙏...

[@dinatukumuriwonabonadam3621]

Thank you Sir

[@zakariahussein3218]

The second supervisor is permanent means not variable right

[@georgesaccountingtutorials]

@@zakariahussein3218 Yeah

[@nickanon9697]

Great

[@babatundekoyi789]

Thanks for your teachings. You made it more simpler. However I have a question; shouldn't we include the 4000 we get if we decide to sell the specialized equipment as our SAVINGS if we decide to outsource the production of aboboyaa

[@georgesaccountingtutorials]

Thanks, Babatunde. Yes, that is an alternative way of answering the question. You can include the 4,000 as "cost savings" under "BUY" as a negative amount (i.e. reduction in cost). That way, the total amount under "MAKE" will become 12,000 (i.e. 6,000 + 4,000 + 1,000 + 1,000) while that of "BUY" will become 14,000 (i.e. 18,000 - 4,000). You'd realize that the net difference yields the same results as when you include it as an opportunity cost under "BUY". That is to say, the 4,000 can either be included as an opportunity cost (i.e. positive amount under "MAKE") or as a reduction in cost (i.e. negative amount) under "BUY". I hope this helps.

[@johnsonbaryeh]

❤

[@reenalynboliver1774]

Thank you!

[@basilwamba2182]

Why did not include the salary of permanent employee of Aboboyq?

[@georgesaccountingtutorials]

Because it is irrelevant to the decision. Whether Aboboyaa decides to make or buy, they still have to pay the salary of the permanent employee. Hence, you do not have to include it in the analysis.

[@someviunity1060]

please you're no more doing videos again and what could the problem be?

[@georgesaccountingtutorials]

Thanks for your concern, Somevi. I had a challenge with my pen tablet. I'm hoping to get a new one soon so I can start uploading more videos.

[@someviunity1060]

@@georgesaccountingtutorials i will ne more thwn delighted please

[@wanny_xx3918]

Please is it the same as pricing decision?

[@georgesaccountingtutorials]

No, please. This is a decision to either manufacture a product internally or buy it from an external supplier.