Costs and Special Order
11
Student: _______________________________________________________________________________________
1. A cost is not relevant if it: A. B. C. D. E. Does not differ for each option available to the decision maker. Changes from period to period. Is a future cost. Is a mixed cost. Is a fixed cost.
2. Variable costs will generally be relevant for decision making because they: A. B. C. D. E. Differ between options. Are volume-based. Have not been committed and differ between options. Differ between options and have been committed. Measure opportunity cost.
3. Fixed costs will often be irrelevant because they: A. B. C. D. Are fixed in amount. Are the same each time period. Typically do not differ between options. Are not committed.
4. A special order is: A. B. C. D. E. Typically expected. A profitable opportunity to sell a specified quantity of a firm 's product or service. Typically unexpected. A particularly large customer order. A rush order.
5. Special orders: A. B. C. D. Are frequent. Are infrequent. Commonly represent a large part of a firm 's overall business. Can never be profitable to a firm.
6. Committed, or "sunk" costs are generally: A. B. C. D. E. Not fixed. Small in amount. From bad decisions. Occurred in the past. Recoverable in trade.
7. All the following are characteristic of relevant costs except: A. B. C. D. E. They are generally variable. They are not committed. They are different in amount for different options. They are in the future. They are inventory costs.
8. The major problem with relevant cost determination is that it fails to recognize the: A. B. C. D. E. Impact of variable costs in the long run. Long-term nature of most product-related decisions. "Sunk" nature of most fixed product costs. Short-term nature of most product-related decisions. Need to calculate costs more precisely.
9. Depreciation is a relevant cost in a decision only in the context of: A. B. C. D. E. Time value of money. Amortized values. Reducing
Student: _______________________________________________________________________________________
1. A cost is not relevant if it: A. B. C. D. E. Does not differ for each option available to the decision maker. Changes from period to period. Is a future cost. Is a mixed cost. Is a fixed cost.
2. Variable costs will generally be relevant for decision making because they: A. B. C. D. E. Differ between options. Are volume-based. Have not been committed and differ between options. Differ between options and have been committed. Measure opportunity cost.
3. Fixed costs will often be irrelevant because they: A. B. C. D. Are fixed in amount. Are the same each time period. Typically do not differ between options. Are not committed.
4. A special order is: A. B. C. D. E. Typically expected. A profitable opportunity to sell a specified quantity of a firm 's product or service. Typically unexpected. A particularly large customer order. A rush order.
5. Special orders: A. B. C. D. Are frequent. Are infrequent. Commonly represent a large part of a firm 's overall business. Can never be profitable to a firm.
6. Committed, or "sunk" costs are generally: A. B. C. D. E. Not fixed. Small in amount. From bad decisions. Occurred in the past. Recoverable in trade.
7. All the following are characteristic of relevant costs except: A. B. C. D. E. They are generally variable. They are not committed. They are different in amount for different options. They are in the future. They are inventory costs.
8. The major problem with relevant cost determination is that it fails to recognize the: A. B. C. D. E. Impact of variable costs in the long run. Long-term nature of most product-related decisions. "Sunk" nature of most fixed product costs. Short-term nature of most product-related decisions. Need to calculate costs more precisely.
9. Depreciation is a relevant cost in a decision only in the context of: A. B. C. D. E. Time value of money. Amortized values. Reducing