Which of the Following Is an Example of Outsourcing

question 359

Multiple Choice

Which of the following is an example of outsourcing?

• A) A U.S. firm moves a manufacturing plant from the U.S. to Thailand where the firm can hire cheaper labor.
• B) A German firm hires an accountant in the U.S. to manage its payrolls.
• C) All the above are examples of outsourcing.
• D) None of the above is an example of outsourcing.

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Definitions:

Fixed Costs

Costs including rent, salaries, and insurance that stay the same regardless of production or sales amounts.

Variable Costs

Costs that fluctuate with the level of production or sales volume, such as materials and labor.

Fixed Costs

Expenses that do not change in total regardless of changes in the volume of goods or services produced or sold.

Operating Income

The profit realized from a business's ongoing operations, calculated before taxes and interest payments are deducted.