In a make or buy decision, management should focus on costs that are constant under the two alternatives.

Question

Quizplus · Accepted Answer

In a make or buy decision, management should focus on all the relevant costs associated with each alternative, not just the constant costs. These costs may include variable costs, opportunity costs, and intangible costs. Therefore, it is false to say that management should only focus on constant costs.

In a Make or Buy Decision, Management Should Focus on Costs