Smiley Face Company manufactures signs from direct materials to the finished product. This is considered:
A)insourcing
B)outsourcing
C)relevant costing
D)sunk costing

Question

Quizplus · Accepted Answer

Insourcing refers to the production of goods or services by a company using its own resources, such as labor and equipment, rather than outsourcing it to a third-party vendor. In this case, Smiley Face Company manufactures signs from direct materials to the finished product using its own resources, so it is considered insourcing. Relevant costing and sunk costing are concepts related to decision-making and have no relevance to the production process. Outsourcing refers to a company contracting with a third-party vendor to perform certain activities or produce certain goods, which is not the case for Smiley Face Company. Therefore, option A is the best choice.

Smiley Face Company Manufactures Signs from Direct Materials to the Finished