In deciding whether to outsource a product, which of the following is an irrelevant cost?
A) Direct materials
B) Variable overhead
C) Fixed overhead that will be avoided if the part is purchased from an outside supplier
D) Fixed overhead that will continue even if the part is purchased from an outside supplier

Question

Quizplus · Accepted Answer

Fixed overhead that will continue even if the part is purchased from an outside supplier is considered an irrelevant cost because it will be incurred regardless of the decision to make or buy the product.

In Deciding Whether to Outsource a Product, Which of the Following