The management accountant of a manufacturing company has been tasked to cost a one-off project for a customer. He is recommending to purchase a component part of the product rather than manufacture it inside the company. He is quite confident in his recommendation as the purchase price of the component from a supplier would be less than the manufacturing cost. The production manager disagrees with the management accountant. He firmly believes the company should make the component specifically for this one-off project. How can you explain the different conclusions of the management accountant and the production manager?

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Answer The different conclusions of the management accountant and the production manager stem from t... View the full answer