Accounting Multiple Choice Question – 18 February 2021

A company manufactures and sells widgets. The directors want to increase profitability and are considering buying in the widgets instead of manufacturing them. 

The company should buy the widgets from an outside supplier if the price is?

Select ONE answer:

1. less than the marginal cost of production.
2. more than the marginal cost of production but less than the marginal cost of sales.
3. more than the marginal cost of sales but less than the total cost.
4. more than the total cost but less than the selling price.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.