Business

Guadalupe Perry

7 September, 16:03

A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit $1.85. Later, a manager has an opportunity to outsource production to another manager, you company at a cost per unit of $1.75. If you are the from $2 to should

a. consider the $400,000 as a sunk cost, not relevant to the decision.

b. should reduce his effort by ignoring any new developments and letting the production run as it is.

c. should ignore the $400,000 fixed cost.

d. Both A & C