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14 Cards in this Set

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A cost that is traceable to a segment through activity based costings may or may not be avoidable cost for decision making.

True

future costs that do not differ between the alternatives in a decision are avoidable costs

False

A cost that is relevant in one decision may or may not be relevant in another decision

True

Opportunity costs are not usually recorded in the accounts of business

True

The book value of old equipment is a relevant cost in a decision to replace that equipment.

False

Fixed costs may or may not be sunk cost

True

In a decision to drop a segment, the opportunity cost of the space occupied by the segment is the cost of renting or building similar space near by.

False

Fixed cost may or not be relevant in decisions about whether a product should be dropped

True

The term joint cost is used to describe the cost incurred after the split off point or to process the product further.

False

Opportunity cost are

relevant in decision making.

In a make or buy decision, relevant cost include

avoidable fixed cost

Management is considering a one-time-only special order. There is sufficient idle capacity to fill the order without affecting any normal sales. Which one of the following is NOT relevant in making the decision.

absorption costing unit product costs

when a mulch-product factory operates at full capacity, decisions must be made about which products to emphasize. In making such decisions, products should be ranked based on:

contribution margin per unit of constraining resource.

Two or more products produced from a common input is called

joint products