The Following Spreadsheet Shows a Simple Outsourcing Decision Model of a Company

question 46

Multiple Choice

The following spreadsheet shows a simple outsourcing decision model of a company that sells shoes.Use the spreadsheet to answer the question(s) below.
-What is the total manufacturing cost incurred by the company?

• A)$525,000
• B)$675,000
• C)$600,000
• D)$450,000

---

Definitions:

Useful Life

The estimated duration an asset is expected to be functional and useful before it needs to be replaced or becomes obsolete.

Operating Cost

Expenses associated with the day-to-day functions of a business excluding cost of goods sold, such as rent, utilities, and payroll.

Value-Based Pricing

A pricing strategy where the price of a product or service is determined based on the perceived value to the customer rather than the cost of production.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.