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Make or Buy Decisions - is not an incremental cost...

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Make or Buy Decisions: Relevant Costs are important. Relevant items: Outside purchase parts, direct materials, direct manufacturing labor, variable manufacturing overhead, mixed materials handling and setup overhead. Incremental costs: the additional total cost incurred for an activity. . Fixed overhead costs will continue to be incurred even if company outsources, so it
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Unformatted text preview: is not an incremental cost. Differential costs: difference in total cost between two alternatives. A "what-if" technique that examines how a result will change if the original predicted data are not achieved or if an underlying assumption changes is called: Sensitivity Analysis...
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