(Solved):A company should always purchase components of its product if the purchase price is less that the…

 

Question

A company should always purchase components of its product if the purchase price is less that the incremental costs of making those components.

– True

– False

 

EXPERT ANSWER

The correct answer is false.

The statement is false because its is not always. The company should consider also the equality of the components or the morale of its production employees in deciding to purchase or not.

Incremental analysis is also called as marginal analysis or differential

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