Which One of the Following Does Not Affect a Make-Or-Buy

question 45

Multiple Choice

Which one of the following does not affect a make-or-buy decision?

• A)variable manufacturing costs
• B)opportunity cost
• C)incremental revenue
• D)direct labour

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a specific activity base.

Job-Order Costing

An accounting method that tracks the costs associated with producing a specific batch of products or performing a specific service.

Manufacturing Overhead Costs

Indirect costs associated with manufacturing, including costs of running the factory, maintenance, and utilities, that cannot be directly traced to a product.

Job-Order Costing

An accounting system that accumulates costs according to individual jobs rather than processes or time periods.