Right answer Why does differential accounting matter in decision-making?a) All historical costs influence decisions equallyb) Relevant costs shape future choices while past costsbecome irrelevantc) Future costs hold no importanced) Sunk costs drive major choices

Explanation of Differential Accounting: Differential accounting is a decision-making approach that…

Answered: Why does differential accounting matter…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 2MC: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on...

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Similar questions

One cost that is irrelevant in decision making is a sunk cost Group of answer choices True False
When making decisions, managers should consider a. revenues that differ between alternatives. b. costs that do not differ between alternatives. c. only variable costs. d. sunk costs in their decisions.
______ are the costs associated with not choosing the other alternative. A. Sunk costs B. Opportunity costs C. Differential costs D. Avoidable costs
Explain why changes in value-stream profitability may be better information than individual product cost for certain decisions.
Which of the following best describes an "opportunity cost"? Group of answer choices costs that were incurred in the past and cannot be changed The distribution of all products to be sold Expected future costs that differs among alternatives Benefits foregone by not choosing an alternative course of action
Is there a difference between relevant costs and incremental costs? Explain. Identify at least two (2) irrelevant costs in a make vs buy decision
Which 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.
Explain the political cost hypothesis of Positive Accounting Theory.
Does the Profitability Analysis play an important role in decision making? How?
In your own words, explain what differential costs mean. How are fixed costs and variable costs related to differential costs? Provide an example of differentials costs by considering a personal or professional decision you recently made where you had to choose between two alternatives. Identify the examples of differential costs within this experience.
What is a product cost? What is a period cost? What is the difference and why is it important to separate these costs in financial reporting and decision-making? What is a variable cost? What is a fixed cost? Why is the difference important to making decisions?
In a drop or continue decision, only the variable costs identified with a product are relevant in a decision-making. true or false?

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Why does differential accounting matter in decision- making? a) All historical costs influence decisions equally b) Relevant costs shape future choices while past costs become irrelevant c) Future costs hold no importance d) Sunk costs drive major choices