9. A business must decide whether to produce a certain part needed for production themselves, or...

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9. A business must decide whether to produce a certain part needed for production themselves, or to buy it from another manufacturer. It can produce the part internally for £10, while it will cost £15 to buy it from another manufacturer. The business has no spare capacity available and will have to reduce the production of one of its other products to produce the part. This will result in the business losing a contribution of £4 per unit from the product it will have to reduce. Is it true or false to say that it would be in the best interest of the business to produce the part internally rather than buy it from a manufacturer? Select one: O True O False 9. A business must decide whether to produce a certain part needed for production themselves, or to buy it from another manufacturer. It can produce the part internally for £10, while it will cost £15 to buy it from another manufacturer. The business has no spare capacity available and will have to reduce the production of one of its other products to produce the part. This will result in the business losing a contribution of £4 per unit from the product it will have to reduce. Is it true or false to say that it would be in the best interest of the business to produce the part internally rather than buy it from a manufacturer? Select one: O True O False

Answer rating: 100% (QA)

True as The cost of making the product is 14 that is cost of making 10 oppor... View the full answer