what is an opportunity cost? List possible opportunity costs associated with a make-or-buy decision
what is an opportunity cost? List possible opportunity costs associated with a make-or-buy decision
In a make-or-buy decision, which costs can be considered relevant? Group of answer choices Unavoidable variable costs, incremental fixed costs, and sunk costs Incremental variable costs, unavoidable fixed costs, and opportunity costs Incremental variable costs, incremental fixed costs, and sunk costs Incremental variable costs, incremental fixed costs, and opportunity costs
PROBLEM 7-2 Use incremental analysis related to make or buy, consider opportunity cost, and identify nonfinancial factors. The management of Shicago Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. • • 8,000 units of CISCO were produced...
In a make-or-buy decision, which costs can be considered relevant?
QUESTION 33 Which one of the following does not affect a make-or-buy decision? Variable manufacturing costs Opportunity costs Incremental revenue Direct labor QUESTION 34 Which of the following terms mean the same thing? Avoidable costs and irrelevant costs Unavoidable costs and incremental costs Sunk costs and relevant costs Joint costs and sunk costs
microenconomics
Opportunity Costs- Graded The concept of Opportunity Cost is one of the most misunderstood concepts in Microeconomics. Therefore, an extra effort in the literature survey is recommended prior to articulating your answers for this week's coursework. Hint: opportunity cost is NOT an outcome of a decision. Let's discuss the cost of attending college. Some of the more common expenses that come to mind include the explicit costs of tuition, books, and room and board. But what about the implicit...
1. List the relevant costs of the make and buy
alternatives in the table below.
Alternatives
Differential Cost to Make
Make
Buy
Direct materials
Direct labor
Variable overhead
Purchase cost
Total relevant cost
2. If Zion decides to buy the component from Bryce, will
operating income increase or decrease, and by how much?
3. Assume that 75% of Zion Manufacturing's fixed overhead for
Component K2 would be eliminated if that component were no longer
produced. If Zion decides to purchase...
1. List the relevant costs of the make and buy
alternatives in the table below.
Alternatives
Differential Cost to Make
Make
Buy
Direct materials
Direct labor
Variable overhead
Purchase cost
Total relevant cost
2. If Zion decides to buy the component from Bryce, will
operating income increase or decrease, and by how much?
3. Assume that 75% of Zion Manufacturing's fixed overhead for
Component K2 would be eliminated if that component were no longer
produced. If Zion decides to purchase...
1. List the relevant costs of the make and buy
alternatives in the table below.
Alternatives
Differential Cost to Make
Make
Buy
Direct materials
Direct labor
Variable overhead
Purchase cost
Total relevant cost
2. If Zion decides to buy the component from Bryce, will
operating income increase or decrease, and by how much?
3. Assume that 75% of Zion Manufacturing's fixed overhead for
Component K2 would be eliminated if that component were no longer
produced. If Zion decides to purchase...
1. List the relevant costs of the make and buy alternatives in the
table below.
Alternatives
Differential Cost to Make
Make
Buy
Direct materials
Direct labor
Variable overhead
Purchase cost
Total relevant cost
2. If Zion decides to buy the component from Bryce, will
operating income increase or decrease, and by how much?
3. Assume that 75% of Zion Manufacturing's fixed overhead for
Component K2 would be eliminated if that component were no longer
produced. If Zion decides to purchase...
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 13,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.31. The unit cost is: Direct materials $0.89 Direct labor 0.27 Variable overhead 0.07 Fixed overhead 2.10 Total unit cost $3.33 Required: 1. What are the alternatives for Basu Company? Make the part in house or buy the part externally 2. Assume that none of the fixed cost is avoidable. List...