In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________.

A Fixed Cost
B Variable Cost
C Total Cost
D Prime Cost

Correct Answer: Variable Cost

In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own Variable Cost. A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases.
Bissoy MCQ
#Commerce #Costing

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