All of the Following Should Be Considered in a Make-Or-Buy

question 74

Multiple Choice

All of the following should be considered in a make-or-buy decision except

• A) cost savings
• B) quality issues with the supplier
• C) future growth in the plant and other production opportunities
• D) whether the supplier will make a profit that would no longer belong to the business

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue.

Revenues

The income generated from normal business operations, calculated by multiplying the price of goods or services by the quantity sold.

Dividends Payable

A liability account in a company's balance sheet indicating the amount in dividends that the company owes to its shareholders but has not yet paid out.

Operating Expenses

Expenses incurred from a company's operational activities, excluding the cost of goods sold, taxes, and interest expenses.