TABLE 4 below provided the details of the costs to produce 125,450 units of Product A. TABLE 4 Items Production costs (R

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Table 4 Below Provided The Details Of The Costs To Produce 125 450 Units Of Product A Table 4 Items Production Costs R 1 (70.41 KiB) Viewed 31 times

TABLE 4 below provided the details of the costs to produce 125,450 units of Product A. TABLE 4 Items Production costs (RM) Direct Materials 144,267.50 Direct Labor 31,362.50 Variable Manufacturing overhead costs 106,632.50 Fixed Manufacturing overhead costs 25,090.00 Administration costs 18,817.50 Total Costs 326,170.00 Now, the company have an alternative to outsourcing the production at RM 2.35 per unit to another manufacturer. As a production manager of the company, you have to suggest to the top management whether or not to outsource the production to another manufacturer through differential analysis. If the company decide to outsource the production of Product A, the existing manufacturing could be rent to another firm that could gain a yearly rental of RM24,000. Again, you have to suggest to the top management whether or not to outsource the production to another manufacturer through the differential analysis.