In a make or buy decision, which of the costs below are relevant
A)Only conversion costs.
B)Fixed costs that can be avoided in the future if the decision is to buy.
C)Only direct material costs.
D)Fixed costs that will not change regardless of the decision.

Question

Quizplus · Accepted Answer

Fixed costs that can be avoided in the future if the decision is to buy are relevant in a make or buy decision. These costs should be considered to determine if it would be more cost-effective to buy a product/service instead of making it in-house. Other costs listed may not be relevant or may only provide partial information in making the decision.

In a Make or Buy Decision, Which of the Costs