Which of the following costs are not considered in a differential analysis for a make-or-buy decision?
A) Indirect materials if the item is purchased.
B) Direct labor if the item is manufactured internally.
C) Fixed overhead that will be eliminated if the item is purchased.
D) Factory supervisor salaries that will continue if the item is purchased.

Question

Quizplus · Accepted Answer

Factory supervisor salaries that will continue if the item is purchased are not considered in a differential analysis because they are not affected by the decision to make or buy.

Which of the Following Costs Are Not Considered in a Differential