Factors Used to Decide Whether to Outsource a Part Include

question 161

Multiple Choice

Factors used to decide whether to outsource a part include ________.

• A) the supplier's cost of direct materials
• B) if the supplier is reliable
• C) the original cost of equipment currently used for production of that part
• D) past design costs used to develop the current composition of the part

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Definitions:

Goods On Consignment

Items that are held by a seller but still owned by the supplier until sold, at which point the supplier receives payment minus a commission.

Resalable

Resalable refers to goods or products that can be sold again, either in their original condition or after being refurbished or repurposed.

Principle of Consistency

An accounting principle that necessitates the use of the same accounting methods and practices from one period to the next for comparability.

Inventory Valuation Method

A system or approach used to calculate the ending inventory's cost and determine the cost of goods sold, affecting the company's profitability and inventory balance.