From a Cost Perspective,outsourcing ________

question 47

Multiple Choice

From a cost perspective,outsourcing ________.

• A)does not provide a company with the option of hiring part-time services
• B)exposes a company to significant financial risk
• C)allows a company to gain economies of scale
• D)results in a lower unit cost

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Definitions:

Cost Control

The process of monitoring and managing the expenses of a business to adhere to a budget or increase profitability.

Flexible Budget Cost Variance

The difference between actual costs and the costs allocated in the flexible budget, which adjusts based on actual levels of activity.

Quantity Variance

A variance that is computed by taking the difference between the actual quantity of the input used and the amount of the input that should have been used for the actual level of output and multiplying the result by the standard price of the input.

Price Variance

The difference between the actual cost of a good or service and its budgeted or standard cost.