1. Cost: Salary of marketing manager Decision: Project discontinuance: manager to be transferred elsewhere in the firm Relevant or Irrelevant? 2. Cost: Home theater installation Decision: Purchase of a new home Relevant or Irrelevant? 3. Cost: Unavoidable fixed overhead Decision: Plant closure Relevant or Irrelevant? The following costs relate to a variety of decision settings:Consider each of the nine costs listed and determine whether it is relevant or irrelevant to thedecision cited.Cost1. Allocated corporate overhead2. Cost of an old car3. Direct materials4. Salary of marketing managerDecisionClosing a money-losing departmentVehicle replacementMake or buy a productProject discontinuance: manager to be transelsewhere in the firmPurchase of a new homePlant closureProduct introduction to marketplace5. Home theater installation6. Unavoidable fixed overhead7. Research expenditures incurred lastyear, related to new product8. $4 million advertising programWhether to promote product A or B with themillion program9. Manufactured cost of existing inventory Whether to discard the goods or sell them tothird-world country

Relevant cost means that cost which helps for decision making. conditions :1. It should be future…

Cost: Salary of marketing manager Decision: Project discontinuance: manager to be transferred elsewhere in the firm Relevant or Irrelevant? 2. Cost: Home theater installation Decision: Purchase of a new home Relevant or Irrelevant? 3. Cost: Unavoidable fixed overhead Decision: Plant closure Relevant or Irrelevant?

Cost: Salary of marketing manager Decision: Project discontinuance: manager to be transferred elsewhere in the firm Relevant or Irrelevant? 2. Cost: Home theater installation Decision: Purchase of a new home Relevant or Irrelevant? 3. Cost: Unavoidable fixed overhead Decision: Plant closure Relevant or Irrelevant?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

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