Question 1
The costs that should be included in an outsourcing decision are
◦ fixed costs.
◦ sunk costs.
◦ nonrecurring costs.
◦ differential costs.
Question 2
Given the following data, what is the total relevant cost of internal production of 2,000 products?
Direct materials | $12.00 |
Direct labor | 4.00 |
Variable overhead | 1.00 |
Total fixed overhead | 9,000 |
Avoidable fixed | 6,000 |
Sunk cost | 8,000 |
◦ $34,000
◦ $49,000
◦ $48,000
◦ $40,000