Podcast
Questions and Answers
Why is it important to differentiate relevant costs from irrelevant costs in short-term decision making?
Why is it important to differentiate relevant costs from irrelevant costs in short-term decision making?
- To focus on past, committed costs
- To simplify and shorten the data gathering process (correct)
- To avoid info overload from too much data
- To increase the historic cost for future actions
Which of the following is an example of an irrelevant cost in short-term decision making?
Which of the following is an example of an irrelevant cost in short-term decision making?
- Future revenue
- Depreciation (correct)
- Cost that differs between alternatives
- Sunk cost
What characteristic makes a future cost relevant in short-term decision making?
What characteristic makes a future cost relevant in short-term decision making?
- It is cash in nature (correct)
- It is committed cost
- It affects the historic cost
- It is a sunk cost
When would a future cost not be relevant in short-term decision making?
When would a future cost not be relevant in short-term decision making?
What is the primary reason to avoid irrelevant costs in short-term decision making?
What is the primary reason to avoid irrelevant costs in short-term decision making?
Which type of cost refers to the difference in costs between decision options?
Which type of cost refers to the difference in costs between decision options?
What type of costs are incurred as a result of taking an option, which otherwise would not have been incurred?
What type of costs are incurred as a result of taking an option, which otherwise would not have been incurred?
What is the resource item required in the making of a product but is limited in supply?
What is the resource item required in the making of a product but is limited in supply?
What is the process aimed at identifying and removing constraints in organizational processes that are standing in the way of organizational goals?
What is the process aimed at identifying and removing constraints in organizational processes that are standing in the way of organizational goals?
What refers to anything that limits an organizational entity from moving toward or achieving its goal?
What refers to anything that limits an organizational entity from moving toward or achieving its goal?
Why is it important to differentiate relevant costs from irrelevant costs in short-term decision making?
Why is it important to differentiate relevant costs from irrelevant costs in short-term decision making?
In short-term decision making, when is a future cost not relevant?
In short-term decision making, when is a future cost not relevant?
What characteristic makes a future cost relevant in short-term decision making?
What characteristic makes a future cost relevant in short-term decision making?
What refers to anything that limits an organizational entity from moving toward or achieving its goal?
What refers to anything that limits an organizational entity from moving toward or achieving its goal?
When would historic costs (sunk, past, committed costs) be considered irrelevant in short-term decision making?
When would historic costs (sunk, past, committed costs) be considered irrelevant in short-term decision making?
Which of the following types of costs refers to the potential benefit given up when choosing one action over another?
Which of the following types of costs refers to the potential benefit given up when choosing one action over another?
What type of costs can be saved by not adopting a given alternative and can be identified as potential savings from discontinuing decisions?
What type of costs can be saved by not adopting a given alternative and can be identified as potential savings from discontinuing decisions?
In the context of labor and overhead costs, which of the following would be considered an irrelevant cost?
In the context of labor and overhead costs, which of the following would be considered an irrelevant cost?
What is the primary characteristic of sunk costs in decision-making?
What is the primary characteristic of sunk costs in decision-making?
What is the process aimed at identifying and removing constraints in organizational processes that are standing in the way of organizational goals called?
What is the process aimed at identifying and removing constraints in organizational processes that are standing in the way of organizational goals called?
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