Question: Which One Of The Following Does Not Affect A Make-or-buy Decision?

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.

Which of the following costs is relevant to 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 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.

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What decision will involve no incremental revenues?

The make or buy decisions will not involve any incremental revenues.

What costs are always relevant?

Relevant costs include differential, avoidable, and opportunity costs. Irrelevant costs include sunk and fixed overhead costs.

What is a cost that Cannot be changed by any present or future decision called?

Irrelevant costs are those that will not change in the future when you make one decision versus another. Examples of irrelevant costs are sunk costs, committed costs, or overheads as these cannot be avoided.

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.

Which of the following is an example of sunk cost?

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.

When should a special order be accepted?

A special order generally should be accepted if: A) its revenue exceeds allocated fixed costs, regardless of the variable costs associated with the order.

Why is make or buy decision important?

Companies use the total transaction costs accrued in developing products to reach a make-or-buy decision. Make-or-buy decisions reward firms with a competitive advantage and reduce the cost of production and capital investment.

Why might a company make a product in-house rather than buy it?

There are several reasons to manufacture in-house instead of outsourcing production. It gives your company a lot flexibility to alter the product as you produce it. In-house production ensures higher quality control. With production in-house, you can keep your overhead low by avoiding foreign managers.

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Which of the following is the decision rule of a sell or process further decision?

sunk costs. The decision rule in a sell-or-process-further decision is: process further as long as the incremental revenue from processing exceeds: fixed processing costs.

Which steps do accountants mostly contribute to in the decision-making process?

Which steps do accountants mostly contribute to in the decision-making process? Determining and evaluating possible courses of action and then reviewing the results of the decision.

Which one of the following is an alternative name for incremental analysis?

Incremental analysis helps to determine the cost implications of two alternatives. It is also known as the relevant cost approach, marginal analysis, or differential analysis.

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