Explanation:
Companies primarily outsource cost reduction. Yet today it is not just a matter of reducing costs but also of taking advantage of the advantages of practice for outsourcing, such as gaining professional skills, minimizing turnover, agile personnel and improving efficiency.
For many businesses, outsourcing — using external companies to handle the job usually done within a company— is a familiar concept. Small businesses often outsource manufacturing, billing, marketing, and many others because they have no choices. Most big firms outsource production to raise.
More broadly, outsourcing risks are usually covered by four broad categories: loss of control; loss of innovation; loss of trust in organizations; and higher transaction costs than expected.
<h3><u>Changes considered to reduce the cost of the project: </u></h3>
Cost Estimates of a Residential Design have the following elements:
1) Quantity Takeoff
2) Labor Hours
3) Labor Rates
4) Material Prices
5) Equipment Costs
6) Subcontractor Quotes
7) Indirect Costs
8) Profit Margin
Quantity Takeoff is the very basic element required in Residential Building. Labor hours and rates depends on the location, work difficulty, market value, and other extrinsic factors. Material prices and Subcontractor Quotes again depends on location, supply and demand. Equipment Costs depends on the location, place of purchase, transportation cost, size of equipment, etc. Indirect costs are overheads for labor and contractors.
As we can check the above elements, we cannot change Quantity takeoff, as no one wants to compromise in the quality. However, we can try to slightly negotiate with Labor rates and Subcontractor Quotes. Again, as mentioned the budget is significantly high, so we need to work on reducing 2 costs, which are Equipment Costs and Material Prices.
Answer:
D: Equity financing
Explanation:
Equity is ownership in the business - equity financing means giving up ownership in order to secure financing.
Answer:
Given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
Explanation:
A cost driver can be described as the unit of an activity or any factor that makes the cost of an activity to fluctuate. An estimated cost driver is adequate and of the expected quality when quality or quantity is satisfactory or acceptable.
Therefore, given this change in the cost, the adequacy and quality of the estimated cost drivers and costs used by the system will determine the costing results for SR6 under the new system.
