Which of the Following Costs Are not Considered in a Differential

question 128

Multiple Choice

Which of the following costs are not considered in a differential analysis for a make-or-buy decision?

• A) Indirect materials and indirect labor if the item is manufactured internally.
• B) Direct materials and direct labor if the item is purchased.
• C) Variable overhead if the item is manufactured internally.
• D) Fixed overhead that will continue if the item is purchaseD.
• A cost that does not change is not included in the analysis

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Definitions:

Tile and Carpeting

Flooring materials; tile refers to hard, durable materials like ceramic used for floors, and carpeting refers to thick, woven fabric coverings for floors.

Permanently Attached

Describes an item or fixture that is fixed securely to a property in such a way that its removal would cause damage to the property or the item itself.

Tenancy at Will

A rental agreement in which either the landlord or the tenant can terminate the lease at any time with sufficient notice, without cause.

Terminate the Tenancy

The legal process of ending a rental agreement or lease, either by the landlord or the tenant, under terms specified by the agreement or law.