Which of the Following Costs Are Not Considered in a Differential

question 139

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

Differentiate between warranty of merchantability and warranty of fitness for a particular purpose.

Recognize the role and limitations of the "caveat emptor" principle in modern commercial law.

Apply the theory of product liability and understand the conditions under which a party can be held liable.

Understand the legal frameworks surrounding negligence, strict liability, and warranty disclaimers in product liability cases.

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Definitions:

Coordination

The organization of the different elements of a complex body or activity so as to enable them to work together effectively.

Machine Bureaucracy

A highly structured organizational form that operates through standardized procedures and a clear hierarchy of authority.

Centralization

Centralization refers to the concentration of decision-making authority and control at the top levels of an organizational hierarchy.

Decision Making

The process of selecting a course of action from multiple alternatives to achieve a desired outcome.