Risks to a Company That Can Result from Outsourcing Include

question 24

Multiple Choice

Risks to a company that can result from outsourcing include:

• A) Customers demanding higher quality and better service
• B) Loss of control over a product or process
• C) Increasing technological capabilities
• D) Lower costs
• E) a and b

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Definitions:

Markup

The amount added to the cost of goods to cover overhead and profit, represented as a percentage of cost or a fixed amount.

Selling Expenses

Costs associated with the marketing and sale of a company's products or services, excluding production costs.

Administrative Expenses

Operating expenses related to the day-to-day operations of a business that do not directly relate to the production of goods or services, such as salaries of office staff and rent.

Variable Direct Materials Cost

The costs of raw materials that vary directly with the level of production output.