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Use the Following Scenario to Answer the Questions Below

Question 2

Multiple Choice

Use the following scenario to answer the questions below.
A company must decide if it will make or buy an item it needs.The company can make the item for $10 / unit,but must spend $15,000 per year in tooling to do so.An outside firm has quoted a total price of $12 / unit to supply the quantity required.
-Refer to the instruction above.Which alternative should be selected if annual requirements are 5,000 units?


A) Make
B) Buy
C) Either make or buy;costs are the same for either option at 5,000 units
D) Can't be determined with information given

Correct Answer:

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