Which of the Following Costs Are Not Considered in a Differential

question 123

Multiple Choice

Which of the following costs are not considered in a differential analysis for a make-or-buy decision?

• A) Indirect materials if the item is purchased.
• B) Direct labor if the item is manufactured internally.
• C) Fixed overhead that will be eliminated if the item is purchased.
• D) Factory supervisor salaries that will continue if the item is purchased.

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Definitions:

Long-Term Needs

Describes requirements or desires that are projected over an extended period, often associated with strategic planning and goals.

Publicity Test

The publicity test is an ethical guideline suggesting that an individual or company should only engage in actions that they would not be embarrassed or concerned about if these actions became public knowledge.

Ethical Decision-Making Metric

A set of guidelines or criteria used to ensure that decisions and actions within an organization are conducted with integrity, fairness, and responsibility.

Ethical-Decision Making Process

A structured approach to determining the best ethical course of action, considering various ethical principles and the impact of decisions on stakeholders.