Which of These Is a Reason to Buy Instead of Make

question 90

Multiple Choice

Which of these is a reason to buy instead of make a component?

• A) Lower risk
• B) Greater flexibility
• C) Market power
• D) All of the above

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Definitions:

Cost Reconciliation Report

A report used to reconcile the costs between starting and ending inventory levels with the costs of goods manufactured and sold.

Work in Process Inventory

Items that are in the process of being manufactured but are not yet complete.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Equivalent Units

A technique in process costing that equates partially finished goods to a specific number of fully completed goods.