Which of the Following Is a Relevant Cost to Be

question 84

Multiple Choice

Which of the following is a relevant cost to be included in a make-or-buy decision?

• A) fixed salaries that will not be incurred if the part is outsourced
• B) pension costs to the current employees
• C) increase in the cost of repairing of all equipment of the firm
• D) material-handling costs that cannot be eliminated even if the product is outsourced

Comprehend metrics that measure profitability and efficiency in the context of financial statement analysis.

Understand the historical and theoretical foundations of the International Monetary Fund (IMF) and its evolving role in the global economy.

Grasp the basic concepts and importance of specialization and exchange in modern economies.

Comprehend the basis and benefits of international trade for individual nations.

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Definitions:

Standard Machine-Hours

The predetermined amount of machine time expected to be used for a specific process or production activity, used for costing and efficiency measures.

Fixed Overhead

Fixed expenditures that are unaffected by production or sales volume, like rental fees, employee salaries, and insurance policies.

Volume Variance

A measure used to evaluate the difference between the expected and actual production volumes.

Predetermined Overhead Rate

A rate calculated before a period begins, based on estimated overhead costs and activity levels, for assigning manufacturing overhead to products.