Which of the Following Costs Is NOT Relevant to a Make-Or-Buy

question 66

Multiple Choice

Which of the following costs is NOT relevant to a make-or-buy decision?

• A) $20,000 of direct labor used to manufacture the parts
• B) $25,000 in rent from leasing the production space to another company if the part is purchased from an outside supplier
• C) the supervisor's salary of $35,000 that will be avoided if the part is purchased from an outside supplier
• D) $40,000 of depreciation on the plant used to manufacture the parts

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Definitions:

Pull Strategy

A marketing approach that focuses on creating demand for a product or service, encouraging consumers to actively seek it out.