In a make-or-buy decision, which costs can be considered relevant?
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
7. Make-or-buy decision. Standard costs and other data for two component parts used by Griffon Electronics are presented below: PART A4 PART B5 8.00 4.70 2.00 $14.70 1.00 4.00 Factory overhead. 8,000 2 $15 Machine hours per unit. Unit cost if purchased. $5 In past years, Griffon Electronics has manufactured all of its required components; however, in the current year only 30,000 hours of otherwise idle machine time can be devoted to component production. Accordingly, some of the parts must...
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...
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
Which of the following items does not have to be considered when evaluating a make-or-buy decision? The reliability of the supplier's delivery schedule. Quality of the supplier's product. Net book value (NBV) of the production equipment used to make the item in question. Contribution margin generated by an alternative use of the production equipment. Financial stability of the supplier.
relevant in comparing decision alternatives o all of the above costs would be considered relevant in comparing decision alternatives Question 2 3.5 pts AG-2m Company reported the following cost information: Cost A Cost B Cost C Units sold June $19,740 $55,020 $37,380 42,000 units July $35,720 $99,560 $37,380 76,000 units Which of the above costs would be classified as a mixed cost? Cost A O Cost B O Cost C both Cost A and Cost B are mixed costs all...
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...