In a Make-Or-Buy Decision, Which Costs Can Be Considered Relevant

question 77

Multiple Choice

In a make-or-buy decision, which costs can be considered relevant?

• A) Unavoidable variable costs, incremental fixed costs, and sunk costs
• B) Incremental variable costs, unavoidable fixed costs, and opportunity costs
• C) Incremental variable costs, incremental fixed costs, and sunk costs
• D) Incremental variable costs, incremental fixed costs, and opportunity costs

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Definitions:

Living Will

A legal document that specifies an individual's preferences regarding medical treatment in situations where they are unable to express informed consent.

Testamentary Trust

A trust that is created by will and therefore does not take effect until the death of the testator.

Constructive Trust

A legal remedy imposed by a court to address wrongdoing or unjust enrichment, creating a fiduciary relationship where the trustee must hold property for the benefit of the beneficiary.

Living Trust

A legal document that places assets into a trust for the grantor's benefit during their lifetime and specifies how to distribute remaining assets after the grantor's death.