Rachel Inc. is deciding whether to continue to manufacture a component or to buy the component from a supplier. Which of the following is not relevant to this decision? Group of answer choices The costs of direct materials that is used to manufacture the component. The alternative of use of the facility currently being used to manufacture the component. The purchase price of the component charged by the supplier. Fixed manufacturing costs that do not differ between the decision alternatives.

Rachel Inc. is deciding whether to continue to manufacture a component or to buy the component from a supplier. Which of the following is not relevant to this decision? Group of answer choices The costs of direct materials that is used to manufacture the component. The alternative of use of the facility currently being used to manufacture the component. The purchase price of the component charged by the supplier. Fixed manufacturing costs that do not differ between the decision alternatives.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 8MCQ: In a make-or-buy decision, a. the company must choose between expanding or dropping a product line....

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(Management Accounting) In make-or-buy decisions for a part for a product, relevant costs include ________. A) some variable costs of making the part B) all variable costs of making the part C) fixed costs that can be avoided in the future if the part is purchased D) B and C
Which of the following items would be relevant in the decision of buying a component part instead of making it? I) The variable cost of making the component part II) The cash proceeds from selling the special equipment used to make the component part III) The cost of buying the component part from an outside supplier IV) The general fixed cost that is allocated to the component part Multiple Choice a) I), II), and IV) b) I), II), and III) c) I) and III) d) II) and IV)
When deciding whether to make or buy a component part, the most relevant consideration is often: Question options: a) The sunk cost of equipment used to manufacture the part. b) The unavoidable fixed manufacturing costs. c) The average total cost of making the part. d) The variable manufacturing costs per unit.
52. Which of the following is true for a make-or-buy decision? Group of answer choices b. Depreciation on equipment used in making the component and having no other use is the critical factor in the decision. c. The company should make the component if the purchase price is less than the per-unit variable cost to make the component. d. The reliability of the outside supplier of the component is unimportant to the decision as this is not quantifiable. e. The quality of the component from the outside supplier is relevant in eventually making the decision.
In Make or buy decision ,relevant costs are : Select one: a. manufacturing costs that will not be saved + the purchase price b. manufacturing costs that will not be saved c. manufacturing costs that will be saved d. the purchase price of the units e. manufacturing costs that will be saved + the purchase price
In a make-or-buy decision, a. the company must choose between expanding or dropping a product line. b. the company must choose between accepting or rejecting a special order. c. the company would consider the purchase price of the externally provided good to be relevant. d. the company would consider all fixed overhead to be irrelevant. e. None of these.
Can direct materials ever be irrelevant in a make-or-buy decision? Explain. Give an example of a fixed cost that is relevant.
All of the following should be considered in a make-or-buy decision excepta. quality issues with the supplierb. future growth in the plant and other production opportunitiesc. whether the supplier will make a profit that would no longer belong to the business d. cost savings
a) Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision. b) What is the decision rule in deciding whether to sell a product or process it further?
Briefly describe the treatment of Joint Costs when making a sell-or-process-further decision. What is the decision rule in deciding whether to sell a product or process it further?
Which of the following is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.
Which of the following costs is relevant in deciding whether to accept a bid to sell obsolete items remaining in inventory? A .Direct materials cost of producing the units B. Engineering costs for design of the units C. Shipping costs D. Product-testing costs