When Evaluating a Make-Or-Buy Decision, Which of the Following Needs

question 15

Multiple Choice

When evaluating a make-or-buy decision, which of the following needs to be considered?

• A) alternative uses of the production capacity
• B) the original cost of the production equipment
• C) pension costs to the current employees
• D) material-handling costs that cannot be eliminated

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Definitions:

Liabilities

Economic responsibilities or liabilities that a business must pay back to others, requiring the disbursement of economic resources over a period.

Sales Taxes Payable

A liability account that represents the amount of sales tax collected from customers by a business, which is owed to the government.

Current Liability

Financial obligations that a company is required to pay within one year.

Advance From Customers

Money received by a company from customers before the related goods or services have been delivered.