Fixed overhead costs that will continue regardless of a make-or-buy decision are ________ to the make-or-buy decision. a-relevant b-irrelevant c-incremental costs d-differential costs e-opportunity costs

Fixed overhead costs that will continue regardless of a make-or-buy decision are ________ to the make-or-buy decision. a-relevant b-irrelevant c-incremental costs d-differential costs e-opportunity costs

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 1MC: ______ are the costs associated with not choosing the other alternative. A. Sunk costs B....

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Question

Fixed overhead costs that will continue regardless of a make-or-buy decision are ________ to the make-or-buy decision.

a-relevant

b-irrelevant

c-incremental costs

d-differential costs

e-opportunity costs

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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