Briefly explain the importance of distinguishing between relevant and irrelevant costs for the purpose of decision making. Provide at least two examples of situations in which the relevant vs. irrelevant classification is useful

Q: Explain the implementation issues of the cost estimation methods

A: Cost estimation is the process of determining the probable cost of a product before starting the…

Q: Which of the following costs is NOT RELEVANT?

A: It is pertinent to note that managerial accounting mainly concentrates on decision making  Inorder…

Q: Which method separating mixed cost is most accurate? Provide reasons for your answer based  on the…

A: Cost under accounting can be of two types i.e. fixed cost and variable cost. The accosting records…

Q: Label each of the following statements as either true (“T”) or false (“F”). An opportunity cost is…

A: Answer:   True.

Q: Sunk costs should always be included when considering the cost of an activity. True or false, and…

A: Sunk cost are those cost which are already incurred by the business , But business cannot recovered…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: The costs that have already been incurred are known as Sunk costs. A sunk cost will not change…

Q: Describe two potential problems that should be avoided in relevant-cost analysis.

A: Relevant cost are the cost that are linked to specific business decisions. They are a part of…

Q: Cost management information should be timely and accurate. Which of these attributes is…

A:

Q: Cost is being classified  in a varity of ways, what benefits can be acquired out of this…

A: Classification by the management in their decision making is significant to help management in the…

Q: Future costs that do not differ among the alternatives are not relevant in a decision.

A: In accounting when it comes to making decisions we classify costs into different types or…

Q: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: please explain the "principle of exceptions" as it relates to cost control.

A:

Q: Which of the following statements is false? (You may select more than one answer.)a. Under some…

A: Sunk Cost: It is refers to the cost or the expense that had incurred in the past and can no longer…

Q: Which of the following costs are irrelevant to business decisions? Avoidable costs Costs that…

A: Sunk costs are irrelevant to business decisions.

Q: Identify at least two (2) irrelevant costs in a make vs buy decision

A: Irrelevant costs are those costs that do not change if any of the alternatives are selected between…

Q: What is the definition of cost?

A: In the business, costs are the important measures to determine the value of elements being purchased…

Q: Explain the difference between a controllable and a noncontrollable cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Explain why unit costs must often be interpreted with caution?

A: Unit cost: Unit cost refers to the average cost per unit which is computed when the total cost of…

Q: What are the three primary cost flow assumptions? How does the specific identification method differ…

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: One cost that is irrelevant in decision making is a sunk cost Group of answer choices True False

A: Sunk costs are those costs that are already incurred and it is irrelevant for the decision-making as…

Q: When making decisions, managers should consider a. revenues that differ between alternatives. b.…

A: The explanation for the given options:   a. A manager on the verge of making decisions must consider…

Q: Discuss the FOUR basic steps in benefit-cost analysis, which aspect of benefit-cost analysis would…

A: Cost-benefit analysis or CBA is referred to as the prices, which helps in measuring the benefits of…

Q: An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes?

A: A cause and effect allocation basis is the cost allocation method in which the allocation base is…

Q: Future costs that do not differ among the alternatives at hand are not relevant in the given…

A: Answer --The statement is TRUE.

Q: What are the advantages and disadvantages of ABC relative to the step-down method of cost…

A: ABC means Activity Based Costing. Costs will be allocated based on the activities the organization…

Q: An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes:…

A: Cost allocation is dividing of all indirect cost between all cost objects based on the resources…

Q: In order to evaluate cost information managers must be able to distinguish between relevant costs…

A: Relevant cost refers to the cost which is usually incurred by lower management in an organization…

Q: Give two examples of sunk costs, and explain why they are irrelevant in decision making.

A:

Q: Which of the following costs can be ignored when making a decision? a. Opportunity costs. b.…

A: Sunk cost can be ignored when making a decision. It is irrelevant cost for decision making.  Sunk…

Q: relevant (differential) revenues and relevant (differential) costs

A: Relevant revenues and relevant costs are two terms used in evaluating the acceptance of special…

Q: Discuss drawbacks/difficulties of Cost- Benefit Analysis used under Utilitarian Approach in Ethics.

A: Cost benefit analysis: It is the technique that is used to compare the project cost and benefits…

Q: Define standard costs and explain how standard cost information is useful formanagement by…

A: Standard costs: These are the costs which a company determines as a standard to attain its…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: Cost accounting is one of the branch of accounting. Under this, various type of costs are being…

Q: What two arguments tend to justify classifying all costs as either fixed or variable even though…

A: Costs are the expenses which are spent by the manufacturing entity to perform its operations or…

Q: Describe briefly the importance of Cost-Benefit Analysis in the selection or development of a…

A: Cost-benefit analysis is an approach to estimate the strengths and weaknesses of a system and…

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.