Is one that can be avoided or eliminated by making a decision not to invest, or to cease investing. Because these costs may be different among options, they will berelevant costs that will need to be addressed if the costs are differentamong the options.Select the correct response:Sunk CostsCommitted CostCommon CostAvoidable CostFixed CostImputed Cost

Avoidable cost are relevant cost which will cease to exist if the activity ceases to exist. They…

Is one that can be avoided or eliminated by making a decision not to invest, or to cease investing. Because these costs may be different among options, they will b relevant costs that will need to be addressed if the costs are different among the options. Select the correct response: Sunk Costs Committed Cost Common Cost Avoidable Cost Fixed Cost Imputed Cost

Is one that can be avoided or eliminated by making a decision not to invest, or to cease investing. Because these costs may be different among options, they will b relevant costs that will need to be addressed if the costs are different among the options. Select the correct response: Sunk Costs Committed Cost Common Cost Avoidable Cost Fixed Cost Imputed Cost

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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What is opportunity cost? Select one: O a. It is the cost of the worst opportunity when we choose one alternative over the next best alternative O b. It is the cost of the best opportunity when we choose one alternative over the next best alternative O c.Itis the benefit lost when we choose more than one alternative O d. It is the benefit lost when we choose one alternative over the next best alternative
Mixed cost is also known as: Select one: a. None of the options O b. Conversion costs O c. Semi-fixed cost O d. Fluctuating cost-
Future costs that do not differ among the alternatives are not relevant in a decision. True or False True False
The concept of present worth allows engineers to convert costs and benefits to an equivalent value at a defined point in time Select one: True False
Which of the following statements are false? SELECT ALL THAT APPLY a. One of the dangers of allocating common fixed costs to a product line is that such allocations can make the line appear less profitable than it really is. b. A new fixed cost that must be paid if a special offer is accepted is not relevant in making the decision. c. A cost that will be incurred regardless of which course of action a manager takes is relevant to the manager's decision. d. Your Company is considering replacing Machine X. The original cost of Machine X is not relevant to this decision.
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When comparing the lower of cost to market the appropriate market value is determined before comparing it to the cost the purpose of the ceiling is to ensure that the write-down is sufficient to cover all expected gains O the purpose of the floor is to prevent an excessive gain from being recognized in the future the process is consistent with the principle of conservatism because the goal is to limit excessive swings in gross margin O000
Which of the following statements regarding marginal costing is incorrect? Select one: O A. It is useful long-term planning technique OB. It assumes that fixed costs remain fixed over relevant activity ranges O C. It assumes that variable costs vary in proportion to activity O D. It assumes that costs can be classified as variable or fixed
Many decision problems have the following simple structure. A decision maker has two possible deci-sions, 1 and 2. If decision 1 is made, a sure cost of c is incurred. If decision 2 is made, there are two possibleoutcomes, with costs c1 and c2 and probabilities p and1 2 p. We assume that c1 , c , c2. The idea is thatdecision 1, the riskless decision, has a moderate cost,whereas decision 2, the risky decision, has a low costc1 or a high cost c2.a. Calculate the expected cost from the riskydecision.b. List as many scenarios as you can think of thathave this structure. (Here’s an example to get youstarted. Think of insurance, where you pay a surepremium to avoid a large possible loss.) For eachof these scenarios, indicate whether you wouldbase your decision on EMV or on expected utility.
Why do you use incremental cost analysis when picking alternatives and how do you constuct a choice table
Outline any problems you are aware of associated with the discounting of future costs and benefits in Cost Benefit Analysis.