In a make or buy decision which of the following is

39. In a make-or-buy decision, which of the following is true?
A. Variable costs are the only relevant costs.
B. Allocated fixed costs are relevant.
C. Alternative uses of space and machinery are relevant.
D. Making the product is the correct decision when there is idle capacity.
40. The opportunity cost of making a component part in a factory with excess capacity for which there is no alternative use is
46. The cost of not receiving rent from a space because you decide to make the part rather than buying it from an outside supplier is considered a(an)
47. In a make-or-buy decision, an opportunity cost that should be considered is the:

Incremental Analysis
10
Decision rule
42. Haribon Company is faced with a make-or-b uy decision. Haribon should agree to buy the part from a supplier provided the price is less than Haribon‟s
A. total costs
B. variable production costs plus avoidable fixed production costs
C. total manufacturing costs
D. variable costs
84. A company owns equipment that is used to manufacture important parts for its production process. The company plans to sell the equipment for P10,000 and
to select one of the following alternatives:
(1) acquire new equipment for P80,000
(2) purchase the important parts from an outside company at P4 per part.
The company should quantitatively analyze the alternatives by comparing the cost of manufacture the parts
Special order decision
Process
49. In making a special order decision, management should:
52. Which of the following factors should be considered in deciding whether to accept a special order?

Incremental Analysis
11
Irrelevant cost