Answer the Following Question(s)using the Information Below

question 61

Multiple Choice

Answer the following question(s) using the information below.Central Medical Supply Inc., a manufacturer of medical testing equipment, has $240,000 worth of an obsolete line of testing equipment.The obsolete equipment can be adapted to fit another line of testing equipment at a cost of $64,000; the market value would then be $136,000.However, Tripac offered to purchase the obsolete equipment as is for $88,000.
-For make-or-buy decisions, relevant costs include

• A)direct material costs plus direct labour costs.
• B)incremental costs plus opportunity costs.
• C)differential costs plus sunk costs.
• D)incremental costs plus fixed costs.
• E)variable costs plus fixed overhead.

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Definitions:

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