The following two statements are about make or buy decisions where the business is considering outsourcing the whole production of one component.

Select whether the following statements are true or false.

Statement One: The material that is used in the production of the component will be a relevant cost.

Statement Two: The cost of decommissioning the machinery used in the production of the components will be a relevant cost.

Select one:

a.

Both statements are false

b.

Statement 1 is true, and Statement 2 is false

c.

Both statements are true

d.

Statement 2 is true, and Statement 1 is false