Please answer the following independent questions. Where applicable. Show all working out (2 marks each)....
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Accounting
Please answer the following independent questions. Where applicable. Show all working out (2 marks each). (a) Jaspar Ltd has 1000 units in inventory that cost $2.00 per unit to produce. Due to changing technology, the sales department is having difficulty selling the product. It will cost $500 to scrap the units. What price should the company consider? (b) Holt Pty Ltd presently makes 20 000 units of a certain part to use in production. The cost to make the part is $20 per unit including $15 in variable costs and $5 in fixed overhead applied. If Holt buys the part from Bricker, the cost would be $18 per unit and the released facilities could not be used for any other activity. Eighty per cent of the fixed overhead would continue. Should Holt make or buy the part? Show all working out
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