In Deciding Whether to Manufacture a Part or Buy It

question 47

Multiple Choice

In deciding whether to manufacture a part or buy it from an outside vendor, a cost that is irrelevant to this short-run decision is:

• A) Direct labor.
• B) Variable overhead.
• C) Fixed overhead that will be avoided if the part is bought from an outside vendor.
• D) Fixed overhead that will continue even if the part is bought from an outside vendor.
• E) Transportation-in charges assessed on external purchases.

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Definitions:

Summary-of-benefits Close

A sales technique that highlights the advantages or positive outcomes of a product or service, leading to a close.

Alternative-choice Close

A sales technique where the customer is given a choice between two options, both leading to a sale, making it easier for them to make a decision without feeling pressured.

Compromise Close

A sales closing technique where the seller and buyer agree on a mutually beneficial solution to overcome any remaining objections to the sale.

Vacuum-laminating Machine

Equipment used to bond layers of materials together using vacuum pressure and adhesive, commonly in manufacturing and woodworking.