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Xebex Pty Ltd Is Considering Whether to Make or Buy

Question 66

Multiple Choice

Xebex Pty Ltd is considering whether to make or buy a component used in the production of Faz Machines. The annual cost of producing the 100 000 components used by the company is as follows. Xebex Pty Ltd is considering whether to make or buy a component used in the production of Faz Machines. The annual cost of producing the 100 000 components used by the company is as follows. If Xebex were to discontinue production of the component, direct fixed manufacturing costs would be reduced by 80 per cent. Xebex should buy the 100 000 components if the cost of purchasing per unit is less than what amount? A) $4.50 B) $4.00 C) $3.80 D) $3.00
If Xebex were to discontinue production of the component, direct fixed manufacturing costs would be reduced by 80 per cent.
Xebex should buy the 100 000 components if the cost of purchasing per unit is less than what amount?


A) $4.50
B) $4.00
C) $3.80
D) $3.00

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