Which of the following would not be relevant to a decision about whether to continue making a part or whether to buy it from an outside supplier?
A) alternative uses for the plant where the part was produced if the part is purchased
B) a fee previously spent for design of the part
C) the variable costs of making the part
D) the number of additional employees needed to make the part

Question

Quizplus · Accepted Answer

The fee previously spent for design of the part is a sunk cost and therefore not relevant to a decision about whether to continue making a part or whether to buy it from an outside supplier. All the other choices (alternative uses for the plant, variable costs of making the part, and the number of additional employees needed) are relevant factors to consider in this decision.

Which of the Following Would Not Be Relevant to a Decision