question archive A company fabricates a company at a cost of $6
A company fabricates a company at a cost of $6
Subject:AccountingPrice:2.89 Bought3
A company fabricates a company at a cost of $6.00. A supplier offers to supply the same component for $5.50. Under what circumstances is it reasonable to purchase from the supplier?
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It would be reasonable to purchase from the supplier if the fixed cost per unit was less than 50 cents. That is, if the fixed cost were less than 50 cents per unit, then the variable cost per unit would exceed the supplier’s price, making the supplier price more attractive
