Which of the Following Costs Are Not Considered in a Differential

question 150

Multiple Choice

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

• A) Indirect materials and indirect labor if the item is manufactured internally.
• B) Direct materials and direct labor if the item is purchased.
• C) Variable overhead if the item is manufactured internally.
• D) Fixed overhead that will continue if the item is purchased.

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Definitions:

U.S. Net Capital Outflow

The unequal ratio of domestic purchases of overseas assets to foreign purchases of domestic assets.

Domestic Investment

Domestic investment is the spending on capital equipment, inventories, and structures within a country by its residents and businesses.

Trade Deficits

A situation where a country's imports of goods and services exceed its exports.

Domestic Investment

The total amount of money that is invested within a country's borders by both the public and private sectors.