Relevant costs of a make-or-buy decision for a part include all of the following EXCEPT:
A)fixed salaries that will not be incurred if the part is outsourced.
B)current direct material costs of the part.
C)special machinery for the part that has no resale value.
D)material-handling costs that can be eliminated if the part is outsourced.

Question

Quizplus · Accepted Answer

Special machinery for the part that has no resale value is a sunk cost and does not affect the make-or-buy decision, as it cannot be recovered or changed by the decision.

Relevant Costs of a Make-Or-Buy Decision for a Part Include