The Application of Costs in Make-or-Buy Decisions: An Analysis

John A. Brierley, Christopher Cowton, Colin Drury

Research output: Contribution to journalArticle


There has been little recent empirical research which has examined the application of costs in make-or-buy decisions. This paper presents the results of a questionnaire survey with 256 British management accountants and interviews with 55 of them that gather evidence about the application of costs in make-or-buy decisions. The results of the questionnaire show that, in general, direct, manufacturing or total costs or some combination thereof are used in make-or-buy decisions. The interviews showed that in some cases that costs may be used inappropriately when the costs include allocated and assigned overheads and this might lead to sub-optimal decisions.
Original languageEnglish
Pages (from-to)794-800
Number of pages7
JournalInternational Journal of Management
Issue number4
Publication statusPublished - Dec 2006


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