Assume a company is considering outsourcing a component part that is part of the production of the product they sell to customers.

Which of the following indicates the need to include an opportunity cost in the make or buy decision?

Multiple Choice

If the company buys the part, the capacity that was used to make the part will not be used.

If the company buys the part, the newly available capacity will be used to introduce and produce another profitable product.

If the company buys the part, it will pay a price to the supplier that is less than the full manufacturing cost of the part.

If the company buys the part, it will continue to pay the full salary of the plant manager.