In break-even analysis, whenever the anticipated volume is greater than the break-even quantity, the firm should not outsource.

Question

Quizplus · Accepted Answer

If the anticipated volume is greater than the break-even quantity, it means that the firm is expected to make a profit. Outsourcing may increase costs and decrease that profit, therefore it is not necessary. However, there may be other reasons unrelated to break-even analysis that make outsourcing beneficial, such as an inability to perform the task internally or a need to focus resources on core competencies.

In Break-Even Analysis, Whenever the Anticipated Volume Is Greater Than