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

In a decision analysis situation, which one of the following costs is generally not relevant to the decision?A. Differential cost.B. Avoidable cost.C. Incremental cost.D. Historical cost.
Which of the following costs can be ignored when making a decision?a. Opportunity costs. b. Differential costs. c. Sunk costs. d. Relevant costs.
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One cost that is irrelevant in decision making is a sunk cost Group of answer choices True False
Relevant costs
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.
When should alternative measurement bases supplement cost?
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
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.
Which of the following statements is false? Multiple Choice In general, the term expense is used for managerial purposes, while the term cost refers to external financial reports. An opportunity cost is the benefit forgone by selecting one alternative over another. An outlay cost is a past, present, or future cash outflow. A cost is a sacrifice of resources.

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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