In most circumstances, all fixed costs cannot be eliminated by outsourcing a product.

Question

Quizplus · Accepted Answer

Fixed costs are costs that do not vary with the level of production or sales, such as rent or salaries. These costs are typically associated with the infrastructure and resources required to operate a business, and are necessary regardless of whether a product is produced in-house or outsourced. Therefore, it is unlikely that all fixed costs could be eliminated through outsourcing.

In Most Circumstances, All Fixed Costs Cannot Be Eliminated by Outsourcing