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 a 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

---

Definitions:

Job Evaluation Data

Information and analysis regarding the responsibilities, duties, and value of a particular job to determine appropriate compensation and classification.

Health and Safety Statistics

Data and metrics related to workplace incidents, injuries, illnesses, and fatalities, used to assess and improve the occupational health and safety conditions.

Zero-Sum Game

A theoretical situation in negotiation or conflict where one party's gain is directly proportional to another's loss, leaving no net benefit.

Constant-Sum Game

A situation in decision theory where the total payoff to all players remains constant regardless of the strategies employed, implying that any gain by one party directly corresponds to a loss by another.