Can you explain why 70000 is irrelevant costs and 80000, 100000 and 50000 is relevant costs?

Xebex Pty Ltd is considering whether to make or buy a component used in the production of Faz Machines. The annual cost of producing the 100 000 components used by the company is as follows. If Xebex were to discontinue production of the component, direct fixed manufacturing costs would be reduced by 80 per cent. What are the irrelevant costs in the decision? Select one: a. $70 000 b. $80 000 C. $100 000 d. $50 000

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In making a decision between whether to make or buy a component it is important to distinguish betwe... View the full answer