Make-versus-buy analysis involves which of the following?
A) Setting total cost of make option versus total cost of buy option and solving for break-even point
B) Setting total cost of make option versus total revenue of buy option and solving for break-even point
C) Setting total revenue of make option versus total revenue of buy option and solving for break-even point
D) Setting total profit from make option versus total profit from buy option and solving for break-even point

Question

Quizplus · Accepted Answer

Make-versus-buy analysis involves comparing the total cost of making a product in-house versus the total cost of buying it from an external supplier. By setting the total cost of the make option versus the total cost of the buy option, one can determine the break-even point at which the costs are equal, and make an informed decision about which option is more cost-effective. Therefore, option A is the best choice.

Make-Versus-Buy Analysis Involves Which of the Following