
Concept explainers
Relevant Costs:
Relevant cost is cost which material for the decision is making process. This cost is likely to be change in subsequent period depending on the decision of the manager.
Incremental Costs:
Incremental cost refers to additional cost incurred to the Company due to change in production activity.
Out-of-Pocket Cost:
Out-of-pocket cost are cost which require investment or outflow of cash to be made in current period. This is a prospective investment for future to be decided by management.
Opportunity Cost:
Opportunity cost is the gain sacrificed in order to gain or acquire something else or other alternative.
Sunk Cost:
Sunk cost is the cost already incurred by the management and has no use for the decision making process.
To identify: Activities listed below are either true (T) or false (F).

Want to see the full answer?
Check out a sample textbook solution
Chapter 23 Solutions
Financial & Managerial Accounting: Information for Decisions w Access Card, 5th edition, ACC 211 & 212, Northern Virginia Community College
- Prada Solutions reported net sales for the year of $3,120,000 and cost of goods sold of $2,430,000 for its existing product lines. A new service line is being considered, and the expected selling price per unit cannot exceed $85 to stay competitive in the market. Calculate the gross profit and the gross profit ratio for the year.arrow_forwardAccount Question answer wanted.arrow_forwardGiven answer with calculationarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





