Question

Answer these following questions: 1. Only variable costs can be relevant or differential cost A. True B. False 2. Fixed Costs which change with a decisions are relevant A. True B. False 3. Sunk costs are always relevant to decisions A. True B. False 4. In incremental analysis, total fixed costs will always remain constant A. True B. False 5. A special order should not be accepted if the sales price is less than the unit variable cost. A. B. True False 6. A company should consider accepting an order for its product at less than its regular sales price A. B. True False 7. An incremental make-or-buy decision depends solely on which alternative is the lowest cost A. True B. False 8. Make vs. Buy involves analyzing both revenue and costs A. True B. False 9. Qualitative (non-financial ) factors sometime over-ride the quantitative (financial) data A. True B. False 10. A cost that has been incurred and cannot be recovered or un-incurred by some future action is called a fixed cost A. True B. False ABC

Answer 1

1.The answer is b.False

Any cost which differ amongst alternatives is relevant and differential cost

2.A. True

Fixed costs which change with decisions are relevant

3.B.False

Sunk costs are always irrelevant as already incurred

4.False, can change

5.b.False should be accepted is revenue is more than cost

6.A.True, if there is spare capacity

7.B. False, qualitative factors are also considered

8.B. False, only costs

9.True

10.False, it is called a sunk cost