Relevant Costs for a Make-Or-Buy Decision for a Component Part

question 71

Multiple Choice

Relevant costs for a make-or-buy decision for a component part include all the following except:

• A) Fixed salaries that will not be incurred if the part is outsourced.
• B) Payroll tax (unemployment insurance cost), because of outsourcing.
• C) Material-handling costs that can be eliminated if the part is outsourced.
• D) Fixed overhead currently being allocated to the part.
• E) Current direct material costs for the part.