What is a typical reason for doing a Make versus Buy analysis?

Answer 1

To determine whether a company should build a new production facility or buy a competitor.

Answer 2

To determine if the product cost can be lowered by switching the manufacturing approach from “make” to “buy” or vice versa.

Answer 3

To determine if your product is competitively priced in the market.

Answer 4

Don’t know

Answer 5

If the manufacturing approach for a product is switched from “make” to “buy” the only costs that will be eliminated are the variable costs. The fixed cost component of standard cost is not eliminated.

Answer 6

Variable cost refers to cost of doing production in-house and standard costs are those costs quoted by suppliers.

Answer 7

Variable cost is a smaller number than standard cost and the goal is to lower the cost as much as possible.

Answer 8

Don’t know

Answer 9

A strategic investment process to determine whether to invest in new manufacturing process equipment.

Answer 10

A manufacturing process to determine the most efficient option for manufacturing a product or portion of a product.

Answer 11

A cross-functional process to determine the lowest total cost option for manufacturing a product or portion of a product.

Answer 12

Don’t know

What is a typical reason for doing a Make versus Buy analysis?

Why should you use variable cost instead of standard cost in a Make versus Buy analysis?

Which of these is the best description of the Make versus Buy decision process?