Question

When deciding whether to make or buy the component what cost of making the component should be compared to the proce of buying the component?

A. $13.90 per unit
B. $18.95 per unit
C. $15.95 per unit
D. $1745 per unit

Answer 1

To decide whether to make or buy a component, you should compare the cost of making the component to the price of buying the component.

Step-by-step explanation:

When deciding whether to make or buy a component, you should compare the cost of making the component to the price of buying the component. In this case, the cost of making the component should be compared to the price of buying the component. Since the options given are $13.90, $18.95, $15.95, and $1745 per unit, the cost of making the component should be compared to these prices.

Based on the information provided, there is no specific cost of making the component mentioned. Therefore, you cannot directly compare the cost of making to any of the given prices. To decide whether to make or buy the component, you would need to calculate the cost of making it taking into account the fixed costs and the marginal costs mentioned in Figures 7.9 and 41.