Which of the following is a disadvantage of outsourcing? Group of answer choices A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize production

Which of the following is a disadvantage of outsourcing? Group of answer choices A. freeing up capacity B. freeing up capital C. transferring production and technology risks D. limiting ability to upsize or downsize production

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 8MC: Which of the following is a disadvantage of outsourcing? A. freeing up capacity B. freeing up...

See similar textbooks

Related questions

Q: Market-based transfer prices are best for the buying division. the company when the selling…

A: Solution: When selling division is operating at capacity, it means it may sell all of his output to…

Q: project should be undertaken? A Opportunity Cost B Sunk Cost C Incremental Costs D None of the…

A: Capital budgeting decisions include all decisions related to the allocation of funds to different…

Q: Transfer Pricing Issues When transfer prices are based on actual cost, a supplying division oftenhas…

A: In order to provide an incentive for a supplying division to reduce costs, the transfer pricing…

Q: When making outsourcing decisions, which of the following is true? a. Expected use of the freed…

A: When making decision on make or buy decision or which are otherwise called as Outsourcing decisions,…

Q: Which of the following is not a consideration when a manager is deciding to discontinue a product or…

A: The management can take decision to discontinue the product or product line in case, its leading to…

Q: Managers have some flexibility in setting the estimated useful lives of depreciable assets. Explain…

A: The managers can determine the useful life of assets. The depreciation per year depends on this…

Q: Which of the statement is not a true reflection of Target cost gap ? The target cost gap =…

A: target costing is the way in which deriving of a target cost is done to set the production manager…

Q: In a make versus buy decision which of the following factors is not relevant? fixed production…

A: Make or buy decision: Every company wants to maximize its net income. The best method to increase…

Q: Which of the following is not an objective or potential advantage of transfer pricing? A) A…

A: In simple words transfer pricing represent the price that one division of company should charge to…

Q: Explain whether the following statements are valid or not valid: A. Target costing ignores non-value…

A: Target costing is an costing technique in which it was the difference between targeted sales minus…

Q: State and explain whether the following statements are valid or not valid: A. Target costing…

A: Target costing is a costing management method where it is the difference between targeted sales…

Q: Which of the following does not represent a primary motivation for business combinations?a.…

Q: Which of the following statements is true about agency efficiency? a. The costs from vertical…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: A possible disadvantage of the ABC method is: (a) It does not allocate costs to the way production…

A: Definition: Activity-based method (ABC): The costing method which allocates overheads to the…

Q: The flow of goods through a production process cannot be at a faster rate than the slowest…

A: The Theory of Constraints is a method for determining the most significant limiting factor (i.e.,…

Q: Business Unit A, the supplying business unit, is selling to an outside market. It has excess…

A: Transfer price refers to the price which is used by the related parties to charge one another. For…

Q: Which is not true in lean manufacturing? a) Process flexibility results in market responsiveness b)…

A: Lean manufacturing is a system that enhances customer value and always strives towards improvement…

Q: Which of the following is a false statement about scrap and by-products? Select one: a. Both scrap…

A: Scrap is the incidental residue from material used in production activities that can be recovered…

Q: What is the appropriate measure of a product's value when a firm is operating under production…

A: Production Bottleneck: Production Bottleneck is a situation of constraint in the manufacturing…

Q: When constrained by a limiting resource, managers often seek to produce those products which have:…

A: When constrained by some budget or limited sources managers often try to make products which lie in…

Q: Monopolists sometimes practice price discrimination to O a. get rid of surplus product. O b,…

A: Correct answer:Option d:Increase profit

Q: Why do product costing systems using a single, volume-based cost driver tend to overcost highvolume…

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With…

Q: Why do product-costing systems based on a single, volume-based cost driver tend to over-cost…

A: Single volume-based cost driver means the basis of allocation of costs to particular products using…

Q: In Classification Of Cost (Marginal costs) What Is A Business Situational Example of the ff:…

A: Cost is the amount which is spend to sold the goods or to provide the service. It is comprises of…

Q: The use of market price in internal transfers, generally, provides managerial incentive and leads to…

A: Market price refers to the price that is prevailing in the market in normal conditions considering…

Q: Which of the following best describes a Joint-Product? a) It is the expected loss in the efficient…

A: When two products are manufactured in such a way that they cannot be manufactured without each…

Q: Which of the following is not an advantageous reason to reduce inventories? a. Inventories provide a…

A: Inventories are the stocks of finished goods which are purchased, utilized as well as maintained by…

Q: Consider a situation in which a firm needs to make a decision regarding the resources to allocate…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: What is the major shortcoming of using income from operations as a performance measure for…

A: Investment center: A department or unit or division of a corporation where its manager is assigned…

Q: Which of the following create value in an industry? (Select all that apply.) When value capture…

A: Value capture is the procedure for retaining some percentage of value provided through every…

Q: osts and long-run average costs? Explain the association between return to scale and economies of…

A: Economies of scale: This term refers to the cost advantage that a firm will gain as a result of a…

Q: Production managers are not concerned about the capacity because capacity creation does not require…

A: Production managers are those who are mainly involved in the production planning.

Q: Explain how IT outsourcing can lead to loss of strategic advantage.

Q: The question of value refers to "is a resource currently controlled by only a small number of…

A: VRIO framework includes the decisions which are to be taken by the firms to make competent…

Q: Which item is usually not relevant to a decision by the divisional manager to reduce the transfer…

A: The opportunity cost are relevant cost by the manager to reduce the transfer price to meet a price…

Q: What are the disadvantages of outsourcing? (BUY)

A: Outsourcing: Outsourcing refers to hiring another company, to undertake a business process of the…

Q: In what way can the use of ROI as a performance measure for investment centers lead to baddecisions?

A: Return On Investment (ROI): It is a measure on the amount of return on a particular investment with…

Q: Which of the following should be used to compute the sales mix so that the break-even computation is…

A: In the case of a multiproduct firm, it is essential to calculate the weighted average contribution…

Q: Explain why using cost as a transfer price is inappropri-ate when the center producing the product…

A: Profit Center: A profit center may be a part of a business that is expected to form an identifiable…

Q: Compared to companies that have a cost structure that is mainly comprised of variable costs,…

A: Ans. Mostly companies incur two types of cost - Variable cost or fixed cost. Variable cost changes…

Question

Which of the following is a disadvantage of outsourcing?

Group of answer choices

A. freeing up capacity

B. freeing up capital

C. transferring production and technology risks

D. limiting ability to upsize or downsize production

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What does it mean to obtain a competitive advantage? What role does the cost management system play in helping to achieve this goal?
1. What factors determine the relevance of information to decision making? 2. What are sunk costs, and why are they not relevant in making decisions? 3. What information is relevant in an outsourcing decision?
Wrong allocation of common costs lead to A. Inaccurate estimation of cost of products or services B. Under utilization of capacity C. Lower profit margin D. All of the above are correct
i.“Differential Costs” are considered as relevant, where as “sunk Cost ” is considered asirrelevant for decision making purposes. Explain ii. Why opportunity cost is measured and relate with the evaluation of alternative, can it bean opportunity loss? iii. Which one either spoiled goods or defective goods are less economical for the companyand why?
Which of following is a disadvantage of outsourcing
Explain why external failure costs can be more devastating to a firm than internal failure costs.
Which of the following is not a type of responsibility center? A. concentrated cost center B. investment center C. profit center D. cost center
What concept relates to the proportionate savings in costs gained when levels of production are increased: A) Accounting profit. B) Economies of scale. C) Marginal costs. D) Barriers to entry. E) Economic profit. The benefit lost when choosing one option precludes receiving the benefits from an alternative option was referred to as: A) Irrelevant costs. B) Lost costs. C) Alternative costs. D) Opportunity costs. E) Sunk costs.
Which of these costs is considered as the most important cost because if it is not met, an enterprise may fail to materialize.a. All of theseb. Increment costc. Fixed costd. First cost
Which of the following costs are irrelevant to business decisions? a. Avoidable costs b. Costs that differ between alternatives c. Sunk costs d. Variable costs
Which of the following costs are irrelevant to business decisions? Avoidable costs Costs that differ between alternatives Sunk costs Variable costs
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.