When Break-Even Analysis Is Applied to an Outsourcing Decision, the Breakeven

question 48

Multiple Choice

When break-even analysis is applied to an outsourcing decision, the breakeven quantity is

• A)the ratio of fixed costs to the difference between variable outsourcing cost and variable in-house production cost
• B)the ratio of the difference between variable outsourcing cost and variable in-house production cost to fixed costs
• C)the product of the variable costs times the fixed costs
• D)the product of the variable costs times the production quantity

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Definitions:

Organism

Any living entity that can function independently, ranging from microscopic bacteria to animals and plants.

Shaping

The process of eliciting a desired response by rewarding behaviors that are increasingly similar to that response.

Discrimination Training

A learning process where an organism is trained to respond differently to distinct stimuli.

Discriminations

The ability to perceive and respond differently to distinct stimuli or to make distinctions in treatment or choice due to differences.