Question

6) Mary must decide between two alternatives for the weekend: babysitting or yard work. If she babysits, she will receive $40 and will incur $15 in transportation costs. If she does yard work, she will receive $40 and will incur $3 in lawn mower gas and oil costs and S5 in transportation costs. The payment she would receive for the jobs is relevant in deciding which alternative to select 6) 7) Sunk costs are sometimes relevant for decision-making purposes 8) Differential revenues are expected future revenues that vary between the alternatives under consideration 9)A business segment should be eliminated if the revenue generated by the segment exceeds only its fixed costs 10) Costs that are not related to any specific product, batch, or unit of production are referred to as facility-level costs. 10)

Answer 1

Ans- 6-False

Explanation:-

as the amount for job received under both the alternative is same i.e. $40 so the amount received for job is not relevant in deciding which alternative to select

7- False

8-True

9-True

Explanation:-

managers look through managerial performance in segment reports and determine whether relevant revenues exceed revenue costs

10-True

Explanation:-

Facility level

costs incurred to support the entire company or segment of a company. Not related to any one specific product, batch or unit of product. Examples: factory depreciation; maintenance; utilities; admin salaries (OH type costs).