Accounting · Management Accounting
Which of the following costs is NOT a relevant cost in a short-term 'make-or-buy' decision context?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The opportunity cost of using a machine that could otherwise generate independent external rental revenue.
- 2The fixed salary of an existing production supervisor who currently has no alternative workload.✓
- 3Incremental variable overheads that will directly increase as a result of making the product in-house.
- 4The cost of specific raw materials that must be purchased externally for the manufacturing order.
Correct answer
The fixed salary of an existing production supervisor who currently has no alternative workload.
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