Factors Used to Decide Whether to Outsource a Part Include

question 161

Multiple Choice

Factors used to decide whether to outsource a part include ________.

• A) the supplier's cost of direct materials
• B) if the supplier is reliable
• C) the original cost of equipment currently used for production of that part
• D) past design costs used to develop the current composition of the part

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Definitions:

Accrued Wages

Wages that have been earned by employees but have not yet been paid by the company, representing a liability on the balance sheet.

Short-Term Lease

A lease for 12 months or less (including expected renewals and extensions) that does not contain a purchase option that the lessee is expected to exercise.

Lease Liability

An obligation representing future lease payments owed by a lessee under the terms of a lease agreement.

Bargain Purchase Option

A clause in a lease agreement that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than the expected fair market value.