Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 1 - The Manager and Management Accounting - Assignment Material - Problems - Page 25: 1-31(1)

Answer

Guideline- Cost-Benefit Approach Reason- Cost Aspect: Production in house cost- direct labour, direct wages, Outsourcing- transportation, purchasing cost; Benefit Aspect: Production in house cost- customization, control over quality, Outsouricing- Specialized expertise, reduced investment in equipments

Work Step by Step

Guideline- Cost-Benefit Approach Reason- Cost Aspect: Production in house cost- direct labour, direct wages, Outsourcing- transportation, purchasing cost; Benefit Aspect: Production in house cost- customization, control over quality, Outsouricing- Specialized expertise, reduced investment in equipments
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