In general, a company should outsource if the cost to buy is:
A) Less than the sum of variable costs and fixed costs
B) Less than the relevant variable costs
C) Greater than or equal to (variable costs + relevant fixed costs - opportunity costs)
D) Less than or equal to (variable costs + relevant fixed costs - opportunity costs)

Question

Quizplus · Accepted Answer

Outsourcing is generally considered beneficial if the cost to buy a product or service is less than or equal to the total cost of producing it in-house. This total cost includes variable costs, relevant fixed costs, and subtracts any opportunity costs that could be avoided by outsourcing.

In General, a Company Should Outsource If the Cost to Buy