Give two examples of sunk costs, and explain why they are irrelevant in decision making.

Q: Label each of the following statements as either true (“T”) or false (“F”). An opportunity cost is…

A: Answer:   True.

Q: Explain Fixed and Variable Costs?

A: Fixed Cost is the cost which remains same irrespective of the capital or strategic decision made by…

Q: Sunk costs should always be included when considering the cost of an activity. True or false, and…

A: Sunk cost are those cost which are already incurred by the business , But business cannot recovered…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: The costs that have already been incurred are known as Sunk costs. A sunk cost will not change…

Q: Is corrective action always necessary when actual costs are higher than standard costs

A: A company which manufactures products and goods keeps a sharp eye on its costs. When the actual cost…

Q: Marginal costing can provide useful information for decision-making. However, there are limitations…

A: There are various limitations of marginal costing few of them are stated below.

Q: Describe two potential problems that should be avoided in relevant-cost analysis.

A: Relevant cost are the cost that are linked to specific business decisions. They are a part of…

Q: “Sunk costs are easy to spot—they’re the fixed costs associated with a decision.” Do you agree?…

A: The Sunk cost is a cost which has been incurred in the past and cannot be recovered and revoked back…

Q: In a replacement analysis, why are the previous costs irrelevant?

A: Replacement Analysis is a capital budgeting method that determines whether existing assets need to…

Q: Costs that will differ between alternatives and influence the outcome of a decision are

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Besides the dollar cost, what other costs should you consider when comparing alternative solutions…

A: A company will incur various costs to earn revenue. The costs can be either direct or indirect costs…

Q: Sunk costs are easy to spot---they're the fixed costs associated with a decision. Do you agree?…

A: Suck Cost: a cost that has already been spent but cannot be recouped; this kind of expense is…

Q: What are the advantages and disadvantages of cost principle

A: Cost principle is an accounting principle that recognizes the asset at their respective cash amounts…

Q: Explain the difference between fixed cost and variable cost? Support your answer with examples

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Future costs that do not differ among the alternatives are not relevant in a decision.

A: In accounting when it comes to making decisions we classify costs into different types or…

Q: “Sunk costs are easy to spot—they’re simply the fixed costs associated with a decision.” Do…

A: Sunk cost: Sunk cost is the cost that has been incurred as a result of past events and such cost…

Q: What are the two components that can affect the contribution margin? Why is it important to…

A: The two components that can affect contribution margin: 1) Number of units sold. 2) Price / cost per…

Q: What is an opportunity cost and why should it be included when making decisions?

A: Opportunity costs is the costs of next best alternative foregone by accepting current alternative.…

Q: Explain the term Variable costs?

A: Cost is the total amount that has to be paid for a product.

Q: Which of the following statements is false? (You may select more than one answer.)a. Under some…

A: Sunk Cost: It is refers to the cost or the expense that had incurred in the past and can no longer…

Q: Which of the following would not be relevant in a make or buy decision? Unavoidable variable costs…

A: Relevant cost considered for making component inhouse: Direct costs Variable overhead Avoidable…

Q: Identify at least two (2) irrelevant costs in a make vs buy decision

A: Irrelevant costs are those costs that do not change if any of the alternatives are selected between…

Q: Describe the Replacement Analysis using the Opportunity-Cost Approach?

A: The company always considers the replacement projects when the old machinery or plant in the project…

Q: What circumstances might create distortions where estimated costs are not an accurate representation…

A: The estimated costs are the costs determined through the estimation process on past…

Q: Why can unitized fixed costs cause errors in decision making?

A: Decision making process: Decision making process requires an understanding of a grasp of illegal…

Q: Explain why unit costs must often be interpreted with caution?

A: Unit cost: Unit cost refers to the average cost per unit which is computed when the total cost of…

Q: One cost that is irrelevant in decision making is a sunk cost Group of answer choices True False

A: Sunk costs are those costs that are already incurred and it is irrelevant for the decision-making as…

Q: be considered

A: The phrase "mixed costs" in accounting refers to costs and expenses that include two components:…

Q: ou agree from the following statements- Explain in details with Variable costs are controllable but…

A: Statement is TRUE but not entirely True. Variable costs are controllable cost while fixed costs are…

Q: me major part of the The cost-benefit-trade-off problem involves identifying all the activities and…

A: A cost-benefit analysis compares the predicted or estimated costs and benefits (or opportunities)…

Q: “Variable costs and differential costs mean the same thing.” Do you agree? Explain

A: Differential cost:   The difference between the costs of two alternatives is considered as a…

Q: What are sunk costs? Give an example.

A:

Q: 1. What are the key cost categories in the traditional view?

A: Traditional view is the type of costing wherein the allocation of factory overheads is done based on…

Q: Do you agree from the following statements- Explain in details with examples 1.Variable costs are…

A: IntroductionProduction cost may be defined as that type of expenses which occurs during the…

Q: what consequences can broad averaging have on costs?

A: Broad Averaging: Broad averaging is also known as peanut butter cost is a costing approach of…

Q: What is a mixed cost? Give an example.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What type of cost is expertise? Is it a fixed cost or a variable cost? Defend your answer.

A: SOLUTION- FIXED COST  ARE THOSE COST WHICH DO NOT CHANGE WITH A REASONABLE LEVEL OF CHANGE .…

Q: Briefly explain the importance of distinguishing between relevant and irrelevant costs for the…

A: The costs that are affected by decision are relevant cost and  those costs are not get affected are…

Q: Which type of incurred costs are not relevant in decision-making (i.e., they have no bearing on…

A: Cost accounting is one of the branch of accounting. Under this, various type of costs are being…

Q: What two arguments tend to justify classifying all costs as either fixed or variable even though…

A: Costs are the expenses which are spent by the manufacturing entity to perform its operations or…

Q: Are variable costs always relevant costs? Explain.

A:

Q: Which one of the following may not be considered a cost driver?

A: Under activity based costing, activities and cost allocation basis (cost drivers) are used to…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.