Which of the Following Would Be Considered in a Make-Or-Buy

question 127

Multiple Choice

Which of the following would be considered in a make-or-buy decision?

• A) fixed costs that will no longer be incurred
• B) prepaid rent expense for warehousing finished goods and inventories
• C) potential rental income from space occupied by the production area
• D) unchanged supervisory costs

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Definitions:

Supplies

Items used in the operations of a business that are consumed or used up in the short term.

Sales Revenues

Sales revenues represent the total amount of money earned by a company from its sales of goods or services before any expenses are deducted.

Plant Equipment

Assets that are durable and used in operations to produce goods and services, typically including machinery, vehicles, and tools.

Earnings Per Share

Earnings per share (EPS) is a financial measure that divides a company's net profit by the number of its outstanding shares of common stock, indicating the company's profitability on a per-share basis.