Question: In A Make-or-buy Decision, Which Costs Can Be Considered Relevant Quizlet?

What costs are always relevant in decision making?

Variable costs are always relevant costs. An avoidable cost is a cost that can be eliminated (in whole or in part) by choosing one alternative over another. A sunk cost is a cost that has already been incurred and cannot be avoided regardless of what action is chosen.

What is a relevant cost quizlet?

A relevant cost is a cost that differs between. Alternatives. A cost that can be eliminated, either in whole or part, by choosing one alternative over another. Avoidable cost. Blank costs are always relevant.

Which of the following is relevant information in a decision whether old equipment presently being used should be replaced by new equipment?

joint costs. difference between future cost savings and the new equipment’s costs. Which of the following is relevant information in a decision whether old equipment presently being used should be replaced by new equipment? It is relevant since it reduces the cost of the new equipment.

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Which of the following is most likely relevant in a make or buy decision?

Which of the following is most likely relevant in a make-or-buy decision? In a make-or-buy decision, the original purchase price of equipment that is currently used in the manufacturing process is usually a relevant cost because the equipment can be sold for its salvage value. Fixed costs are always sunk costs.

What kind of cost is never relevant?

Sunk costs are those costs that happened and there is not one thing we can do about it. These costs are never relevant in our decision making process because they already happened!

What are the relevant costs in a make or buy decision?

Examples of relevant costs in the context of a make or buy decision include direct labor, direct materials, variable overhead. Other costs that should be considered in this category are any incremental costs necessary for a part manufacturing.

Which one of these is a sunk cost quizlet?

(1) Sunk costs (A sunk cost is a cost that has already been incurred and cannot be avoided regardless of what a manager decides to do.) For example, the purchase price of equipment is a sunk cost. (2) Future costs that do not differ between the alternatives.

What do you mean by relevant cost?

Relevant cost is a managerial accounting term that describes avoidable costs that are incurred only when making specific business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process.

What is sunk cost example?

A sunk cost refers to a cost that has already occurred and has no potential for recovery in the future. For example, your rent, marketing campaign expenses or money spent on new equipment can be considered sunk costs. A sunk cost can also be referred to as a past cost.

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Which of the following does not influence the make or buy decision?

Which of the following will not affect a make-or-buy decision? Differential fixed costs.

What is the process of evaluating financial data that change?

The process of evaluating financial data that change under alternative courses of actionis called a. double entry analysis.

Which is the first step in the management decision making process?

The first step in making the right decision is recognizing the problem or opportunity and deciding to address it. Determine why this decision will make a difference to your customers or fellow employees.

What is make buy decision explain with examples?

A Make or Buy Decision is a decision made to either manufacture a product/ service in house or buy it from outside suppliers (outsourcing) based on cost-benefit analysis.

What is the make-or-buy decision?

A make-or-buy decision is an act of choosing between manufacturing a product in-house or purchasing it from an external supplier.

What is a make-or-buy decision quizlet?

Make vs. Buy Decision. the act of deciding whether to produce an item internally or buy the item from an outside supplier. make. Producing (i.e., manufacturing) materials or products internally (i.e., in operations owned by the company).

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