Which one of the following does not affect a make-or-buy decision?
A)variable manufacturing costs
B)opportunity cost
C)incremental revenue
D)direct labour

Question

Quizplus · Accepted Answer

Incremental revenue is not relevant to a make-or-buy decision as it does not affect the costs of manufacturing the product. The decision to make or buy is based on a comparison of the costs of producing the product in-house versus the costs of buying it from an outside vendor. Variable manufacturing costs and direct labor are relevant factors that affect the cost of producing the product. Opportunity cost is also important in the decision-making process, as it involves the cost of giving up one alternative in favor of another.

Which One of the Following Does Not Affect a Make-Or-Buy