question archive Which statement is true concerning the decision rule on whether to make or buy? The company should buy as long as total revenue exceeds present revenues
Which statement is true concerning the decision rule on whether to make or buy? The company should buy as long as total revenue exceeds present revenues
Subject:SociologyPrice:3.87 Bought7
Which statement is true concerning the decision rule on whether to make or buy?
| The company should buy as long as total revenue exceeds present revenues. |
| The company should buy if the incremental revenue exceeds the incremental costs. |
| The company should buy assuming no additional fixed costs are incurred. |
| The company should buy if the cost of buying is less than the cost of producing. |
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answer---The company should buy if the cost of buying is less than the cost of producing.
Make or buy decision is taken on the basis of cost of manufacturing and cost of buying. It is better to buy when cost of making is more than buying and vice versa.
The revenue will remain same whether product is made or purchased from outside hence revenue is not a deciding factor in make or buy decision.
