Which of the Following Costs Is NOT Relevant to a Make-Or-Buy

question 72

Multiple Choice

Which of the following costs is NOT relevant to a make-or-buy decision?

• A)£10,000 of direct labour used to manufacture the parts
• B)£30,000 of depreciation on the plant used to manufacture the parts
• C)the supervisor's salary of £25,000 that will be avoided if the part is purchased from an outside supplier
• D)£15,000 in rent from leasing the production space to another company if the part is purchased from an outside supplier

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Definitions:

Orientation Session

A meeting or seminar designed to introduce new members, employees, or participants to organization policies, goals, and procedures.

Bottleneck Station

A stage in a production or work process that limits overall capacity due to its lower speed or efficiency compared to other stages.

Complementary Product

Products that enhance the value or utility of another product when used together.

Demand Management

The process of forecasting, planning, and controlling demand for products and services to optimize supply chain performance.