Gnome Company Is Trying to Decide Whether to Continue to Manufacture

question 160

Multiple Choice

Gnome Company is trying to decide whether to continue to manufacture a particular component or to buy the component from an outside supplier. Which of the following is RELEVANT to this decision?

• A) The potential uses of the facilities that are currently used to manufacture the component
• B) The insurance on the manufacturing facility which will continue regardless of the decision
• C) Allocated corporate fixed costs which would have to be allocated to other products if the component is no longer manufactured
• D) The cost of the equipment that is currently being used to manufacture the component

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Definitions:

Electronic Networks

Refers to interconnected systems or circuits that facilitate communication or data exchange between electronic devices.

Informal Task Structures

Refers to the unofficial and emergent patterns of relationships and workflows that develop within an organization, complementing the formal organizational structure.

Threshold Point

The critical juncture in a process or system at which a significant effect or change occurs; often used in decision-making or in understanding when a situation becomes critical.

Complex Interactions

Situations where multiple variables and factors interact in intricate ways, leading to unpredictable outcomes.