Answered: The amount of increase or decrease in…

The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative O discretionary cost O differential cost O period cost O product 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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Relevant of differential cost analysis takes all variable and fixed costs into account to analyze decision alternatives considers only variable costs as they change with each decision alternative considers the change in reported net income for each alternative to arrive at the optimum decision for the company considers all variable and fixed costs as they change with each decision alternatives The term that refers to costs incurred in the past that are not relevant to a future decision is full absorption cost sunk cost incurred marginal cost under allocated indirect cost
variable costs change in direct proportion to a change in the activity level. True or False?
What are: Relevant / irrelevant / Differential Costs Relevant / irrelevant / Differential Revenues Avoidable / unavoidable costs Sunk costs
In incremental analysis, only relevant costs are considered when making a decision among alternatives. Explain what relevant costs are. Would these include only variable costs? Explain.
The term that refers to costs incurred in the past that are not relevant to a decision is: Multiple Choice indirect cost. sunk cost. period cost. marginal cost.
Which of the following is a correct definition of the margin of safety? The excess of contribution margin over fixed costs The excess of gross margin over target income 0 The excess of sales revenue over the breakeven point The excess of ner income over all costs (both variable and fixed
In incremental analysis, the only costs to be considered are O relevant costs. sunk costs. O variable costs. O manufacturing costs.
example of lower of cost or net realizable value and explain
Which type of income statements, Contribution Format or Traditional Format should be used to identify relevant costs? Please provide explanation for your answer. Then provide an example including two income statements based on absorption and variable costing, respectively, to support your explanation.
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
A 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.
A cost that has characteristics of both a variable cost and a fixed cost is called a Oa. variable/fixed cost Ob. sunk cost Oc. discretionary cost Od, mixed cost