Question

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

Answer 1

Question 33

Correct answer--------------Incremental revenue

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In make or buy decision we calculate relevant cost of making and buying and compare both to take correct decision. The revenue is irrelevant for make or buy decision.

Question 34

Correct answer--------------Joint cost and sunk cost

All avoidable cost are relevant cost while all unadvoidable and sunk cost are irrelevant cost.