In a Make-Or-Buy Decision, Management Would Consider

question 40

Multiple Choice

In a make-or-buy decision, management would consider:

• A) Cost advantages
• B) Negative qualitative factors
• C) Alternative uses for idle facilities
• D) All of these should be considered

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Definitions:

Marginal Output

The additional quantity of a product that is produced from using one more unit of an input, keeping other inputs constant.

Diminishing Returns

A principle stating that if one factor of production is increased while other factors are held constant, the incremental output or benefit gained will eventually decrease.

40-Acre Farm

A piece of farmland covering 40 acres, often used historically in the context of post-Civil War land redistribution promises in the United States.

Variable Costs

are expenses that vary directly with the level of production or output.