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.

Question

Quizplus · Accepted Answer

Managers must consider both fixed and variable costs when deciding whether to outsource. Fixed costs include things like buildings, equipment, and salaries, while variable costs include raw materials, labor, and utilities. Ignoring either type of cost could lead to an incomplete analysis and an ill-informed decision about outsourcing. Sunk costs, which are costs that have already been incurred and can't be recovered, should also be taken into account but aren't the only factor to consider.

In Deciding Whether to Outsource, Managers Must Consider