When considering whether or not to make or buy a product,an entity should identify which of the following:
A) incremental income and incremental costs.
B) opportunity costs.
C) all of these options should be identified in the decision-making process.
D) additional costs from making the product.

Question

Quizplus · Accepted Answer

All of the options listed should be identified in the decision-making process. Incremental income and costs are important to consider in terms of the financial impact of making or buying a product. Opportunity costs are important to consider in terms of what else the entity could potentially do with its resources if it chose to make or buy the product. Additional costs from making the product, such as production and labor costs, are important to consider in terms of the actual expenses incurred for making the product. Therefore, all options should be identified to make an informed decision.

When Considering Whether or Not to Make or Buy a Product,an