Which of the following would not be relevant to a decision about whether to continue making a part or buy it from an outside supplier?
A)alternative uses for the plant where the part was produced if the part is purchased
B)the number of additional employees needed to make the part
C)the variable costs of making the part
D)a fee previously spent for design of the part

Question

Quizplus · Accepted Answer

The fee previously spent for the design of the part is a sunk cost, which is irrelevant to future decisions such as whether to continue making a part or buy it from an outside supplier. Sunk costs are past costs that have already been incurred and cannot be recovered.

Which of the Following Would Not Be Relevant to a Decision