Which of the Following Is a Potential Risk of Selfsourcing

question 16

Multiple Choice

Which of the following is a potential risk of selfsourcing?

• A)Reduced technological know-how for future innovation.
• B)Lack of documentation and external support leads to short-lived systems.
• C)Reduced degree of control.
• D)Increased dependency on outside organizations.

Comprehend how direct materials, direct labor, and manufacturing overhead budgets are integrated within the master budget.

Recognize how sales forecasting impacts budget preparation.

Understand the technique for setting budgeted sales and expense levels.

Understand the principles of cash collections and accounts receivable in a budgeting context.

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Definitions:

Attractive Investment

An investment that is appealing due to its potential for favorable returns or its alignment with investment criteria.

Simple Rate

A basic method for calculating interest or return, often expressed as a percentage over a period of time.

Cash Operating

Cash operating activities involve the cash inflows and outflows directly related to the core business operations, such as revenue from sales and payments to suppliers.

Useful Life

The estimated duration of time a fixed asset is expected to be useful for its intended purpose.