Make or Buy Decisions Flashcards
1
Q
Excess Capacity
A
Cost that will be avoided (or saved) if the product is NOT made
2
Q
Under Excess Capacity
A
compare variable costs to the purchase price and select cheapest option
3
Q
No Excess Capacity
A
Cost that will be avoided (or saved) if the product is not made PLUS
the opportunity cost to the purchase price and select the cheapest alternative
