In Deciding Whether to Manufacture a Part or Buy It

question 31

Multiple Choice

In deciding whether to manufacture a part or buy it from an outside vendor,which of the following represents a cost that is not relevant to the short-run decision?

• A)direct labor.
• B)variable overhead.
• C)fixed overhead that will be avoided if the part is bought from an outside vendor.
• D)fixed overhead that will continue even if the part is bought from an outside vendor.

---

Definitions:

Work Hours

The period of time during which an individual is actively engaged in work tasks.

Opportunity Cost

The charge of letting go of the subsequent best choice when deliberating on options.

Tuition

The fee for instruction, especially at a formal institution of learning.

Work Hours

The amount of time an individual spends performing tasks or duties for an employer during a given period.