In a "Make-Or-Buy" Decision

question 115

Multiple Choice

In a "make-or-buy" decision:

• A) Only variable costs are relevant.
• B) Fixed costs that can be avoided in the future are relevant.
• C) Fixed costs that will continue regardless of the decision are relevant.
• D) Only opportunity costs are relevant.
• E) Opportunity costs are generally zero.

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Definitions:

Degree of Excellence

A measure of how well a product, service, or process meets predetermined standards of quality and customer expectation.

Variability Control

A practice in quality management aiming to reduce or eliminate variation in processes or products to ensure consistency and reliability.

Service Quality

The degree to which a delivered service meets and fulfills the customer's expectations and requirements.

Determinants

Factors that decisively affect the nature or outcome of something.