In an Outsourcing Decision, the General Rule Managers Should Follow

question 35

Multiple Choice

In an outsourcing decision, the general rule managers should follow is to

• A) Choose the option with the lowest relevant cost
• B) Maximise the use of constrained resources
• C) Outsource if the price is greater than the sum of variable costs and fixed costs
• D) Do not outsource if the cost is less than the sum of relevant fixed costs and opportunity costs

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Definitions:

Canada Revenue Agency

The federal agency responsible for administering tax laws for the Canadian government and for most provinces and territories.

Taxable Income

The amount of income used to calculate how much the individual or company owes in taxes to the government.

Total Taxes

The cumulative amount of state, federal, and other government taxes charged on a company's or individual's income and activities.

Deductible

An amount subtracted from an insurance claim payment.