A manager invests $400,000 in a technology to reduce overall costs of production.The company managed to reduce their cost per unit from $2 to $1.85.After a year,the manager has an opportunity to outsource production to another company at a cost per unity of $1.75.If you are the manager,you

Question

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A) While the $400,000 is a sunk cost, it is still relevant to the decision-making process as it represents an opportunity cost that must be taken into account.
B) Economic profit takes into account all relevant costs, including the opportunity cost of the $400,000 investment, and would therefore provide a better measure of the profitability of outsourcing.
C) Avoiding the fixed-cost fallacy is important as it encourages managers to consider all costs, including fixed costs, when making decisions.

A Manager Invests $400,000 in a Technology to Reduce Overall