Which of the Following Is FALSE with Regard to the Make

question 11

Multiple Choice

Which of the following is FALSE with regard to the make or buy option?

• A)The advantage of outsourcing activities that do not directly contribute to the company's bottom line reduces production costs.
• B)The advantage of outsourcing activities that do not directly contribute to the company's bottom line reduces capital investment.
• C)The advantage of outsourcing is the opportunity for the primary firm to avoid responsibility for product failure due to outsourced production.
• D)The disadvantage of outsourcing is possible loss of control over the outsourced production of the work that has been outsourced.

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Definitions:

Direct Labor Cost

Expenses related to employees who directly work on the manufacturing of products, distinct from indirect labor involved in supervisory and administrative roles.

Overapplied Manufacturing Overhead

A scenario in which the overhead assigned to goods or services surpasses the actual costs, necessitating adjustments in financial accounting.

Cost of Goods Sold

Cost of goods sold represents the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Finished Goods Inventory

Finished and market-ready products still awaiting purchase.