Quick Answer: Which Of The Follwoing Is Most Likely Relevant In A Make Or Buy Decision Incremental?

Which of the following cost is relevant to a make or buy decision of a particular part of a product?

Explanation: Direct labor cost is a relevant expense that is to be considered in a make or buy decision making process.

Which of the following is irrelevant in an incremental analysis of the decision to keeping or eliminating an unprofitable business segment?

Sunk costs are not relevant in incremental analysis. When a company is deciding to retain or replace equipment, trade-in value of the existing equipment is irrelevant. If a company decides to eliminate an unprofitable segment, its net income will always increase.

Which of the following are relevant in short term decision making purchase price of new?

Which of the following are relevant in short – term decision making? Purchase price, reduction in variable costs, additional revenue and opportunity costs are relevant in short – term decision making.

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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.

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 costs are always irrelevant in decision making?

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! These costs are never a differential cost, meaning, they are always irrelevant.

Are sunk costs relevant in decision-making?

A sunk cost is a cost that cannot be recovered or changed and is independent of any future costs a business might incur. Because a decision made today can only impact the future course of business, sunk costs stemming from earlier decisions should be irrelevant to the decision-making process.

What is the correct order of the decision-making?

Evaluate your decision list your options, list the consequences of each option, identify the decision, choose the best option and try it. B. List your options, identify the decision, choose the best option and try it, list the consequences of each option, evaluate your decision.

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What is sell or process further?

The sell or process further decision is the choice of selling a product now or processing it further to earn additional revenue. This choice is based on an incremental analysis of whether the additional revenues to be gained will exceed the additional costs to be incurred as part of the additional processing work.

Which cost is relevant in decision-making?

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.

Which is relevant in short-term decision-making?

In short-term decision-making, costs are considered to be relevant to the decision only if they are different as a direct result of the decision. Relevant costs include marginal or differential costs – these are the costs which differ between alter- natives.

Which will always be a relevant cost?

Only variable costs will be relevant. Both variable and fixed costs will be relevant. Both variable and fixed costs will be relevant.

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 relevant range?

The relevant range is the range of activity where the assumption that cost behavior is a straight line (linear) is reasonably valid. With variable costs then, the relevant range will be the range where the cost of adding one more, will be the same as the last.

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