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199) In most circumstances, all fixed costs can be eliminated by outsourcing a product.

200) An opportunity cost is a past cost.

201) Qualitative factors play an important part in make or buy decisions.

202) Outsourcing decisions are best made by comparing the total manufacturing costs, both fixed and variable, allocated to the product versus the total unit cost charged by the outsourcing company.

203) The maximum outsourcing price a company is willing to pay can be found by solving for the company's indifference point.

204) Opportunity costs should be factored into outsourcing decisions.

205) Companies often consider outsourcing so they can focus on their core competencies.

206) In deciding whether to outsource, managers must consider

A) relevant fixed and variable components.

B) sunk costs.

C) only variable costs.

D) none of the above.

207) Outsourcing decisions are sometimes referred to as

A) make-or-buy decisions.

B) make decisions.

C) buy decisions.

D) none of the above.

208) All of the following are outsourcing considerations, except

A) Are any fixed costs avoidable if we outsource?

B) How do our fixed costs compare to the outsourcing cost?

C) What could we do with the freed capacity?

D) How do our variable costs compare to the outsourcing cost?

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Accounting 2 Months Ago 9 Views
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