A Firm Is Most Likely to Outsource Services When

question 87

Multiple Choice

A firm is most likely to outsource services when

• A)the cost of production is cheaper when done onshore.
• B)the labor costs are high in the country where the outsourcing partner is.
• C)the human capital is low in the country where the outsourcing partner is.
• D)the effectiveness of services produced internally is less than that produced offshore.
• E)the goods produced onshore are of better quality than those produced offshore.

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Definitions:

Employee Salaries and Wages

Payments made to employees for their labor, including both fixed salaries and variable wages.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for more accurate forecasting and planning.

Planning Budget

A budget created at the beginning of the budgeting period that is valid only for the planned level of activity.

Budgeted Overhead Cost

The anticipated indirect costs of production planned for a specific period, often part of a company's operating budget.