Relevant Information for Decision Making

In: Business and Management

Submitted By roliza8
Words 7862
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Chapter 10—Relevant Information for Decision Making

MULTIPLE CHOICE

1. Costs forgone when an individual or organization chooses one option over another are a. | budgeted costs. | b. | sunk costs. | c. | historical costs. | d. | opportunity costs. |

ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling

2. Which of the following costs would not be accounted for in a company's recordkeeping system? a. | an unexpired cost | b. | an expired cost | c. | a product cost | d. | an opportunity cost |

ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling

3. Which of the following is not a characteristic of relevant costing information? It is a. | associated with the decision under consideration. | b. | significant to the decision maker. | c. | readily quantifiable. | d. | related to a future endeavor. |

ANS: C PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling

4. A fixed cost is relevant if it is a. | uncontrollable. | b. | avoidable. | c. | sunk. | d. | a product cost. |

ANS: B PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Decision Modeling

5. Relevant costs are a. | all fixed and variable costs. | b. | all costs that would be incurred within the relevant range of production. | c. | past costs that are expected to be different in the future. | d. | anticipated future costs that will differ among various alternatives. |

ANS: D PTS: 1 DIF: Easy OBJ: 10-1 NAT: AACSB: Reflective…...

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