MANAGEMENT IN DECISION AND CONTROL

Mannaesi

HELLOW,CAN SOMEONE CORRECT ME ON THE ATTACHED IF I WENT WRONG

Pian32

You have gone wrong on the fixed cost line.

All fixed costs directly related to the units are saved costs because if outsourced they won't be incurred. That will also affect the last line by the same amount.

Mannaesi

@Pian32 you mean for product b and c???and i thought i stated that we be saving 5000 and 6000???what do you mean bro,for product a we will not be outsourcing so i think its extra fixed cost of 1000

Pian32

In your answer savings are in (_) . The fixed cost line asks for savings if you outsource so all of them are savings. You then need to add them together to get the total cost/(saving)

Mannaesi

@YAH IN MY ANSWER SAVINGS ARE IN(-)SO FOR PRODUCT B AND C,WE BE SAVING 5000 AND 6000 AND THAT IS WHY THY ARE IN BRACKETS...AM NOT SURE IF I GET YOU @Pian32 PLEASE EXPLAIN TO ME USING FIGURES IF POSSIBLE DRAW SAME TABLE AS MINE PLEASE

Pian32

In your answer they're not in brackets so down as a cost.
A B C
Unit Variance: 14 17 7
Unit variable out: 12 21 10
Annual extra cost/(saving):(2000) 8000 12000
Annual Fixed cost/(saving):(1000) (5000) (6000)
Total extra annual cost/(saving):
(3000) 3000 6000

A saves 3000
B costs 3000
C costs 6000

Mannaesi

oohkay i get you bro its a mistake they should be on brackets thanks and the 1000 for product A should be the one out of bracket.

Thank you so much @Pian32 will also correct the annual cost/savings,really appreciate it bro