Which of the Following Is an Advantage of Offshoring

question 5

Multiple Choice

Which of the following is an advantage of offshoring?

• A) Hidden costs and risks are rarely involved in offshoring.
• B) U.S. firms can charge lower prices through offshoring.
• C) Offshoring is the best way to improve business agility.
• D) Information risks are low when offshoring services.
• E) Offshoring is the best way to increase customer responsiveness.

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Definitions:

Direct Labor

The labor costs directly attributable to the production of goods or services, which includes wages paid to workers who physically produce the product.

Manufacturing Overhead

All costs related to the production process that are not direct materials or direct labor, known as indirect expenses.

Period Costs

Expenses that are not directly tied to production activity and are expensed in the period they are incurred.

Variable Selling Expense

Costs that vary directly with the volume of sales, such as commissions and shipping charges.