Define Outsourcing and Discuss at Least Two Advantages and Two

question 15

Essay

Define outsourcing and discuss at least two advantages and two disadvantages of this organizational option.

---

Definitions:

Absorption Costing

A costing method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, with fixed overhead expenses treated as period costs.

Carpenter Wages

Carpenter wages are the compensation paid to skilled tradespeople specializing in building, constructing, and repairing structures primarily made of wood.

Absorption Costing

This total costing technique allocates all production costs to products, comprising direct labor, materials, and fixed and variable overheads, to accurately reflect production expenses.