For a Firm That Currently Makes a Particular Component, Which

question 60

Multiple Choice

For a firm that currently makes a particular component, which of the following are qualitative factors that would be considered following a quantitative analysis in favour of buying?

• A) Buying increases uncertainty, in particular with respect to timely availability of the component.
• B) Buying surrenders control over product design and quality.
• C) Employee morale would be affected if a decision to buy meant dismissing staff.
• D) All of the given answers

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Definitions:

Credit Column

The column in an accounting ledger where credit transactions are recorded, reflecting increases in liabilities, equity, or revenue, or decreases in assets or expenses.

Service Revenue

The income a company earns from providing services as opposed to selling physical goods, and it is recorded as it is earned in the accounting period.

Balance Sheet Columns

Sections in a balance sheet that categorize assets, liabilities, and shareholder's equity at a specific point in time.

Unearned Revenue

Money received by a company for goods or services not yet delivered or provided; often considered a liability.