Question: Spring 20 Company is trying to decide whether to continue to manufacture a particular component or to buy the component from a supplier. For each

Spring 20 Company is trying to decide whether to continue to manufacture a particular component or to buy the component from a supplier. For each of the following, state whether it is a RELEVANT or IRRELEVANT cost to the decision.

1. The potential uses of the facilities that are currently used to manufacture the component.

2. Direct materials costs.

3. Allocated corporate fixed costs which would have to be allocated to other products if the component is no longer manufactured.

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