Which of the Following Are Relevant in a Make or Buy

question 69

Multiple Choice

Which of the following are relevant in a make or buy decision?
$\text {\underline{ Prime costs} }$         $\text {\underline{ Sunk costs} }$               $\text {\underline{ Incremental costs} }$

• A)yes yes yes
• B)yes no yes
• C)yes no no
• D)no no yes

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Definitions:

Lean Accounting

An accounting system characterized by fewer transactions, combined accounts, nonfinancial performance measures, and direct tracing of overhead.

Conversion Costs Account

An accounting term that combines direct labor and overhead costs associated with transforming raw materials into finished goods.

Direct Labor

Labor costs that can be directly traced to the production of specific goods or services, unlike indirect labor costs which cannot be directly linked to production.

Long Lead Times

Extended periods required to manufacture a product or complete a process, often causing delays in production or output.