Costing Outsourcing

2(a) Refer to Table 2. Calculate the difference between the annual cost of outsourcing the transport of fuel in country X with the existing annual cost of transport. (8 marks)
Summer 2018 Paper 31

Current Cost($)____________________________________________Outsourcing Cost($)
Variable Cost__________600m x 0.1 = 60m____________________600m x 0.13 = 78m
Fixed Cost________________________ 20m
Depreciation________________________5m
Allocated Head Office Cost___________4m
Total_______________________________89m

Cost saving = 89m - 78m = $11 million

Costing Outsourcing

2(a) Refer to Table 2. Calculate the difference between the annual cost of outsourcing the transport of fuel in country X with the existing annual cost of transport. (8 marks) Summer 2018 Paper 31

2(a) Refer to Table 2. Calculate the difference between the annual cost of outsourcing the transport of fuel in country X with the existing annual cost of transport. (8 marks)
Summer 2018 Paper 31