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:

Magnitude

The size, extent, or importance of something, often used in mathematical contexts to describe the absolute value of quantities.

Whiskey Rebellion

Violent protest by western Pennsylvania farmers against the federal excise tax on whiskey, 1794.