A Firm Facing a Make-Or-Buy Decision Must Decide Whether to Meet

question 74

Multiple Choice

A firm facing a make-or-buy decision must decide whether to meet its needs internally or to acquire goods or services from external sources.Whether to make or buy depends on which of the following factors?

• A)cost factors.
• B)dependability of suppliers.
• C)quality of purchased materials.
• D)All of the answers are correct.

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Definitions:

Passive Activity

Economic activities in which the taxpayer does not materially participate, often resulting in income or losses for tax purposes.

Rental Activity

Involves leasing property to others and is often subject to specific tax rules and reporting obligations, including the possibility of passive activity loss limitations.

Deductibility

Deductibility refers to the eligibility of an expense to be subtracted from gross income to reduce taxable income, based on IRS guidelines.

Schedule C

A form used by sole proprietors to report income and expenses from a business or profession to the IRS.