Pretend you are, again, a manager of your favorite manufacturing company (from discussion 3 and 5).
- You have been asked to determine whether a product (one of your choosing) should be manufactured in-house or outsourced to another vendor.
- Discuss the relevant costs you would consider for this decision as well as irrelevant costs and sunk costs.
- How would you use differential analysis to arrive at this decision?
- Are there any other items that should be considered when making this decision?
Nobles, T. L., Mattison, B. L., Matsumura, E. M. (2014). Horngren’s financial and managerial accounting (4thed.). Upper Saddle River, NJ: Pearson Education, Inc.