The Altamonte Division of Custom Industries is in need of a particular service. The service can be obtained from another division of Custom at "cost," with cost defined as the summation of variable cost ($9) and fixed cost ($3). Alternatively, Altamonte can secure the service from a source external to Custom for $10. Which of the following statements is true?
A. Altamonte should both compare $10 versus $12 in deciding where to acquire the service and from Custom's perspective; the proper decision is reached by comparing $10 versus $9.
B. Altamonte should compare $10 versus $3 in deciding where to acquire the service.
C. From Custom's perspective, the proper decision is reached by comparing $10 versus $9.
D. Altamonte should compare $10 versus $9 in deciding where to acquire the service.
E. Altamonte should compare $10 versus $12 in deciding where to acquire the service.
Answer: A
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