In deciding whether to manufacture a part or buy it from an outside vendor, a cost that is irrelevant to this short-run decision is:
A) Direct labor.
B) Variable overhead.
C) Fixed overhead that will be avoided if the part is bought from an outside vendor.
D) Fixed overhead that will continue even if the part is bought from an outside vendor.
E) Transportation-in charges assessed on external purchases.

Question

Quizplus · Accepted Answer

The Answer of In deciding whether to manufacture a part or buy it from an outside vendor, a cost that is irrelevant to this short-run decision is:
A) Direct labor.
B) Variable overhead.
C) Fixed overhead that will be avoided if the part is bought from an outside vendor.
D) Fixed overhead that will continue even if the part is bought from an outside vendor.
E) Transportation-in charges assessed on external purchases.

In Deciding Whether to Manufacture a Part or Buy It