Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 2MC
Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making?
A. avoidable costs
B. unavoidable costs
C. sunk costs
D. differential costs
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Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making?
Group of answer choices
A. avoidable costs
B. unavoidable costs
C. sunk costs
D. differential costs
Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on future events) and should be excluded in decision-making?A. avoidable costsB. unavoidable costsC. sunk costsD. differential costs
In a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.
Chapter 10 Solutions
Principles of Accounting Volume 2
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- ______ are the costs associated with not choosing the other alternative. A. Sunk costs B. Opportunity costs C. Differential costs D. Avoidable costsarrow_forwardList the acceptable cost flow assumptions under IFRS. Be sure to explain the reasoning as to why IFRS find certain cost flow assumptions unacceptable.arrow_forwardWhat advantage does the FIFO cost method have over the average cost method relative to providing information for cost control?arrow_forward
- Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.arrow_forwardA cost that cannot be changed because it arises from a past decision and is irrelevant to future decisions is a. An uncontrollable cost. d. An opportunity cost. b. An out-of-pocket cost. e. An incremental cost. c. A sunk cost.arrow_forwardCosts that will differ between alternatives and influence the outcome of a decision are Select one: O a. None of the answers are correct O b. Sunk costs. O c. Product costs. O d. Period costs. e. Relevant costs.arrow_forward
- What is the benefit of identifying avoidable and unavoidable cost in decisionmaking process? Discuss. **Do not provide the benefit of avoidable cost and unavoidable cost. The question is asking the benefit of IDENTIFYING.arrow_forwardA cost that has been incurred in the past, cannot be recouped, and is not relevant to future decisions is termed a a. period cost b. replacement cost c. sunk cost d. differential costarrow_forwardConsider the following statements concerning costs. 1. A committed cost cannot vary with the decision. 2. An outlay cost cannot vary with the decision. Are the above statements true or false?arrow_forward
- Any cost that is avoidable is relevant for decision purposes. O A. True O B. Falsearrow_forwardWhich of the following statements is false? (You may select more than one answer.)a. Under some circumstances, a sunk cost may be a relevant cost.b. Future costs that do not differ between alternatives are irrelevant.c. The same cost may be relevant or irrelevant depending on the decision context.d. Only variable costs are relevant costs. Fixed costs cannot be relevant costs.arrow_forwardCosts that will differ between alternatives and influence the outcome of a decision are Select one: Oa. None of the answers are correct O b. Sunk costs. O c. Relevant costs. O d. Product costs. O e. Period costs.arrow_forward
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Relevant Costing Explained; Author: Kaplan UK;https://www.youtube.com/watch?v=hnsh3hlJAkI;License: Standard Youtube License